Goldman Sachs Sees More Upside in Gasoline as Diesel Crunch Deepens
Diesel prices and margins will continue to grow amid tightening markets, but gasoline could offer even more upside as refiners currently prioritize diesel output, Goldman Sachs says. The investment bank is switching its key fuel market recommendation away from diesel timespreads and onto European gasoline for the middle of next year in a note carried by Bloomberg. “The key reason for this new…
Goldman Sachs predicts additional upside potential in gasoline amid a deepening diesel crunch, according to a note disclosed by Bloomberg. The investment bank has adjusted its focus from diesel timespreads to European gasoline for the middle of next year, citing the rapid tightening of gasoline markets. The shift in recommendation stems from refiners prioritizing diesel production over gasoline, intensifying gasoline shortages.
Goldman's commodity analysts attributed this development to the significant reduction in global refining activity this time of year, the lowest since the 2020 pandemic. The Middle East and Russia's war-related refinery outages have severely impacted diesel supplies, while increased output in the Americas and Africa has only offset about a third of the lost supply.
As a result, Goldman's analysts anticipate record-high refining margins and escalating diesel prices well into the next year. In contrast, gasoline presents "more upside price opportunities," making it an attractive investment option. Goldman now advises investors to go long in European gasoline futures for the middle of 2027.
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