Goldman Sachs Highlights Diesel Market Risks Amid Supply Squeeze
Samantha Dart of Goldman Sachs warns that diesel supply is critically affected by geopolitical tensions, particularly in Russia and the Middle East. The potential for price increases could significantly impact global markets as winter demand approaches.
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Goldman Sachs' Samantha Dart has identified diesel as the most vulnerable oil product due to geopolitical tensions disrupting supply chains. Ongoing issues with Russian refining and conflicts affecting the Strait of Hormuz are contributing to a tightening market.
The firm's strategy includes a long diesel time spread, advising long positions on December 2023 contracts and short positions on March 2024 contracts. Additionally, Dart noted an oversupply in the natural gas market post-crisis, recommending shorts for summer 2028 European natural gas.
Global refinery runs are currently at a seasonal low, exacerbating supply constraints. If these trends continue, diesel may become a focal point, leading to further price volatility.
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