Save for later Print Download Share LinkedIn Twitter Expectations for surplus of crude in the first half of 2022 have so far been subverted by a confluence of factors in crude and product markets. Energy Intelligence, the International Energy Agency (IEA) and others saw looser balances early this year, which could have helped to cool off oil prices. But instead benchmark Brent is now sniffing $90 per barrel. A combination of winter demand and depleting product tanks are jacking up refinery margins around the globe, allowing refiners to bid up crude prices and still make lots of money. Sweeter grades that have little sulfur are especially in demand. They help refiners to offset the costs of high natural gas prices in operations and cash in on high-demand products like very-low-sulfur fuel oil and diesel. Throw in the potential for supply disruptions, thin spare crude oil capacity, and the growing conviction that Omicron might be the last stand of the pandemic, and a bullish cocktail has been concocted. It all helps explain why Brent, a sweet North Sea crude, has soared. A late start to winter and a slow buildup of refinery runs, combined with oil releases from strategic petroleum reserves, caused last year's second half rally to fizzle in November. But bullish October predictions are now materializing. Instead of filling tanks ahead of winter, refiners are now scrambling to prevent tanks from running too low. Energy Intelligence sees global commercial inventories at 5.56 billion bbl, the same level as in the fall of 2018. It is even tighter for the OECD, as the IEA said this week. “OECD industry stocks were last reported at comparable levels in [the first quarter of 2015],” the agency noted in its latest monthly Oil Market Report.