Goldman Sachs says the fuel market may now offer more attractive opportunities in gasoline as well as diesel. According to a note cited by Bloomberg, the investment bank is shifting its main recommendation away from diesel timespreads and toward European gasoline for the middle of next year.
The bank’s analysts say the change reflects refinery behavior. As diesel markets tighten further, refiners are steering more output toward diesel, which is in turn rapidly tightening gasoline supply.
For months, Goldman Sachs has argued that the biggest supply squeeze in oil products is concentrated in diesel. The bank says global refining activity for this time of year is at its lowest level since the 2020 pandemic, leaving diesel at the “epicenter” of the fuel supply crunch.
In a note at the end of July, Goldman’s commodity analysts said war-related refinery outages in the Middle East and Russia had sharply reduced global fuel supply, especially diesel. Increased output in the Americas and Africa, they estimated, has offset only about a third of the lost supply.
Goldman’s commodity team said refinery outages were 60% above the seasonal average at the end of August. As a result, global diesel inventories remain low and the bank expects tight market conditions to extend into next year.
Throughout the summer, the global refined products market has become increasingly tight, with refining margins hitting record highs because supplies of petroleum products are much more constrained than crude supply.
While Goldman Sachs still expects diesel futures to climb further, its analysts said this week that gasoline now offers “more upside price opportunities.” They are therefore recommending long positions in European gasoline futures for the middle of 2027.
