Goldman Sachs now sees greater upside in European gasoline versus diesel, shifting its recommendation to long gasoline futures for mid‑2027. The bank cites tightening diesel supplies from Middle East and Russia outages, driving refiners to prioritize diesel and leaving gasoline markets undersupplied.
Market Impact
- Cost of capital for refiners may rise as diesel premiums stay elevated, while gasoline‑focused projects could attract cheaper financing.
- Investor sentiment turns bullish on European gasoline contracts and bearish on diesel spreads, prompting portfolio reallocations.
- Oil majors with strong gasoline cracking margins (e.g., Shell, TotalEnergies) could see share price upside; diesel‑heavy players may face margin pressure.
Key Takeaways
- Goldman Sachs recommends long positions in European gasoline futures for mid‑2027, citing tighter gasoline markets.
- Diesel supply crunch persists due to Middle East and Russian refinery outages, keeping diesel premiums high.
- Refiners are shifting output to diesel, further constraining gasoline availability and creating price upside.
Analyzed by FNXT Experts