Weakening Crude Oil Demand Weighs on Prices as Freight Costs Rise and Refining Margins Slip

Crude oil prices in some physical markets have weakened due to higher freight costs and lower refining margins, suggesting potential demand weakness.

West Africa's two biggest crude exporters, Nigeria and Angola, have large overhangs for November loadings. Crude premiums have fallen $1-2/barrel.

Physical markets like the North Sea and U.S. have also weakened recently as refining margins fall worldwide.

West African crude demand unlikely to pick up unless premiums fall further or oil product prices rise.

Key freight rates and refining margins for products like naphtha and gasoline have slipped on higher crude prices.