Demand from refiners determines the price of crude. This simple fact is easily lost amid discussions on breakeven levels of marginal fields and a focus on the headline crude benchmark prices. A nearly $10/bl rise in oil markets over the last week has been cast as a reaction to a drop in the number of rigs drilling in the US. But strong refining margins are the real bedrock underpinning the rally. And they will be a major source of volatility in the near term.
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