Goldman Sachs Group IncGoldman Sachs more than doubles its 2027 diesel refining margin forecast, a bullish analyst call tied to the bank.

Goldman Sachs has warned that the global refining market is facing tightness due to the war in the Middle East and the conflict between Russia and Ukraine, prompting the bank to more than double its forecast for diesel production margins in 2027. It now expects U.S. diesel margins to be $63 per barrel, up from its previous estimate of $27, and European Union margins to be $49 per barrel, up from just $19. Goldman Sachs analysts noted that increased attacks on refineries in the Middle East and Russia are further limiting already tight global refining capacity, pushing refined product margins to new highs. Currently, disrupted refining capacity is 60% above seasonal averages, while product inventories continue to decline even as some demand has disappeared. The situation is likely to tighten further after Russia extended its diesel export ban until September amid increased attacks from Ukraine. Meanwhile, diesel demand in Brazil, the world's second-largest importer, is rising, and the approaching winter in the Northern Hemisphere in the coming months is likely to increase demand for heating fuel, which could add further pressure to an already tight diesel market.
Goldman Sachs Group IncGoldman Sachs more than doubles its 2027 diesel refining margin forecast, a bullish analyst call tied to the bank.