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OIL PRODUCTS: Global Diesel Market to Find Price Support in 2025

OIL PRODUCTS

The global diesel market will likely find price support in 2025 from the closure of about 1% of refining capacity, analysts told Reuters.

  • This will offset the current weakness and structural downward pressure as the world shifts to cleaner fuels.
  • Around 1m b/d of refining capacity will permanently come offline in 2025 due to weak profits.
  • Meanwhile, global demand is seen rising slightly by around 95k b/d, according to the IEA.
  • FGE expects diesel demand to contract by 230k b/d year-on-year over Jan-Dec amid forecasts that the northern hemisphere winter will be the coldest in 10 years and cut road fuel use.
  • Changes to shipping rules in the Med region from May will make it an Emission Control Area and should bolster gasoil demand by 50k b/d.
  • JP Morgan expects European diesel margins to trade around $17-$19/b in 2025, rising to $21/b in 2026.

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