Goldman Sachs Analysts Recommend Long Position in European Gasoline
Goldman Sachs has recommended a long position in European gasoline for mid-2027 due to refiners shifting production to diesel and tightening gasoline markets.
Goldman Sachs analysts have recommended taking a long position in European gasoline for mid-2027, stating that gasoline markets are tightening as refiners shift their production from gasoline to diesel.
Production Shift and Tightening Markets
Goldman Sachs analysts, led by Yulia Zhestkova Grigsby and Daan Struyven, explained the main reason behind their new recommendation in a published report. Accordingly, the shift of refiners' production from gasoline to diesel is rapidly tightening gasoline markets.
Pressure from Global Fuel Market Conflicts
Global fuel markets came under pressure this year under the combined influence of the US-Iran conflict and the war between Russia and Ukraine. During this period, Ukrainian forces heavily struck Russian refineries.
Record Increases in Diesel Prices
With product price increases in the US outpacing the rise in crude oil prices, diesel futures closed at record levels. During the same period, average retail pump prices for diesel also reached all-time highs.
Price Opportunities in the Gasoline Market
Analysts noted that although diesel prices have potential for further increases, gasoline currently offers greater opportunities for price appreciation. Among the reasons behind this are more resilient demand and relative changes in inventories.
New Strategy and Expectations
As a result of these developments, the bank's analysts terminated their previous forecast of generating gains between different diesel contracts. The published report featured the heading "Higher diesel prices are leading to higher gasoline prices."