Goldman Sachs: Tight fuel supply spreads, gasoline has more room to rise than diesel
The Zhitong Finance App learned that Goldman Sachs Group said that with the spread of tension in the global fuel market, gasoline prices are expected to continue to rise. The bank has adjusted its trading strategy to shift the focus from diesel to gasoline, which is widely used as a vehicle fuel.
Analysts including Yulia Zhestkova Grigsby and Daan Struyven said in the report: “The key reason for this new proposal is that refiners are shifting production from gasoline to diesel, which is rapidly tightening the gasoline market.”
Since this year, the US-Iran conflict and the Russian-Ukrainian war have jointly impacted the global fuel market. In particular, Ukraine has attacked Russian refineries. In the US, the settlement price of diesel futures has set a record, and the average retail price of diesel has also risen to an all-time high, and the price increase of refined oil products far exceeds that of crude oil.
Goldman Sachs analysts said in a September 16 report that although diesel may rise further, gasoline currently provides “greater price growth opportunities” due to more resilient demand and relative changes in inventories.
As a result, the bank closed its previous trading position on the price difference (that is, time spread) of different diesel contracts and proposed to go long for European gasoline in mid-2027.
Additionally, Goldman Sachs warned earlier this month that if attacks on shipping in the Middle East escalate further, international oil prices could rise to $120 per barrel. However, compared to betting directly on crude oil, Goldman Sachs recommended that investors buy more refined oil products such as European natural gas and diesel at the time to hedge against geopolitical risks, because the supply shock faced by these markets may be worse than crude oil.
Global fuel tension boosts US refining stocks
The Middle East conflict has driven oil prices to soar this year, and energy stocks have risen accordingly. The stock prices of US superoil giants ExxonMobil (XOM.US) and Chevron (CVX.US) have risen about 40% so far in 2026, but US refining stocks have performed better because the global refined oil market is much tighter than the crude oil market.
The stock prices of Phillips 66 (PSX.US), Valero Energy (VLO.US), and Marathon Crude Oil (MPC.US) have all risen by more than 100% so far this year. The fuel market continues to tighten as supplies of more than 7 million b/d of refined oil products from the Middle East and Russia are interrupted.
Maryanne Mannen, chairman, president and CEO of Marathon Crude, said during the second-quarter earnings call last month: “The global balance of refined oil products remains extremely tight, and gasoline and diesel inventories are at one of the lowest levels we have ever seen.”
Phillips 66 CEO and Chairman Mark Rahill said on the second-quarter earnings call in early August: “The current situation is more like a supply shock than a demand shock. A large amount of refining capacity has stopped, and inventories are very low.” “We believe it will take much longer for this situation to return to normal than in 2022,” he added.
Phillips 66, Valero Energy, and Marathon Crude Oil all reported better-than-expected second-quarter profits, and are expected to maintain high profit margins until the end of the year and even next year, because market stocks of refined oil products are too low, and global refining capacity cannot make up for supply problems in the Middle East and Russia.