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Diesel Margins Set to Rebound: Goldman Sachs

OIL PRODUCTS
HomepageGoldman Sachs Market NewsCommoditiesEnergy BulletsBullet

Distillate cracks have likely bottomed out and are set to rebound from the latest plunge since early February, Goldman Sachs said in a note, cited by Bloomberg.

  • Cracks declined around $10/bbl since early February, but low distillate inventories, strength in gasoline markets, and Asian refining margins near cost-support should benefit the outlook for a rebound, the note said.
  • The demand outlook for diesel also looks stronger than for gasoline as air travel continues to rise, while gasoline demand slows with increasing use in electric vehicles.
  • Additional upside is expected from a structural bull market in oil tankers that will raise transport costs.
  • The bank sees an upside to Dec 2024 ARA gasoil-Brent cracks of around $6/bbl in the base case to $29/bbl vs $23/bbl.
    • Gasoil MAR 24 up 0.7% at 835.25$/mt
    • ULSD APR 24 up 0.3% at 2.66$/gal
    • Gasoil MAR 24-APR 24 down 2.75$/mt at 18$/mt
    • Gasoil JUN 24-DEC 24 up 2$/mt at 29.75$/mt
    • EU Gasoil-Brent up 0$/bbl at 24.48$/bbl
    • US ULSD crack up 0.3$/bbl at 33.49$/bbl
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Distillate cracks have likely bottomed out and are set to rebound from the latest plunge since early February, Goldman Sachs said in a note, cited by Bloomberg.

  • Cracks declined around $10/bbl since early February, but low distillate inventories, strength in gasoline markets, and Asian refining margins near cost-support should benefit the outlook for a rebound, the note said.
  • The demand outlook for diesel also looks stronger than for gasoline as air travel continues to rise, while gasoline demand slows with increasing use in electric vehicles.
  • Additional upside is expected from a structural bull market in oil tankers that will raise transport costs.
  • The bank sees an upside to Dec 2024 ARA gasoil-Brent cracks of around $6/bbl in the base case to $29/bbl vs $23/bbl.
    • Gasoil MAR 24 up 0.7% at 835.25$/mt
    • ULSD APR 24 up 0.3% at 2.66$/gal
    • Gasoil MAR 24-APR 24 down 2.75$/mt at 18$/mt
    • Gasoil JUN 24-DEC 24 up 2$/mt at 29.75$/mt
    • EU Gasoil-Brent up 0$/bbl at 24.48$/bbl
    • US ULSD crack up 0.3$/bbl at 33.49$/bbl