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Higher Distillate Cracks Forecast  Amid Tight Refining: Goldman

OIL PRODUCTS

Distillate margins and refined product volatility are too low due to structural tightness in the refining market and refined products exposure to potential Red Sea disruptions according to Goldman Sachs.

  • ICE gasoil cracks forecasts have been raised by $3/bbl to $27/bbl in 2024 and $25/bbl in 2025.
  • “The key structural tailwinds to distillate margins are elevated refining utilization rates, a lighter slate, high freight costs, and still relatively high global natural gas prices, while low inventories and positioning offer additional cyclical support.”
  • Gasoline cracks have risen more quickly than expected this year assisted by increased positioning. The US RBOB gasoline-Brent crack forecasts have been revised slightly lower with Sum24 at $22/bbl and Cal25 to $14/bbl due to weaker inventory trends.

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