Goldman Sachs: Release of European Reserves Could Cut Diesel Prices by $11

Goldman Sachs: Release of European Reserves Could Cut Diesel Prices by $11. At a Glance: Goldman Sachs does not expect the planned supply of Russian diesel to significantly affect global diesel prices. According to the bank's estimate, a possible release of 50 million barrels from Europe's strategic diesel reserves could reduce wholesale prices in the US and Europe by about $11 per barrel. Goldman warned that the refined fuel products market

At a glance, Goldman Sachs does not expect the planned supply of Russian diesel to have a significant effect on the world price of this fuel. To the warning of the official of the Central Bank of England: We should not wait for the second wave to control inflation. At a glance, Megan Green, a member of the monetary policy committee of the Central Bank of England, said that the monetary policy of this country is not so contractionary. Blackrock's new turn in the American market; Reduction of stocks and increase of treasury bonds at a glance Blackrock reduced the weight of American stocks from "overweight" to "neutral" and short-term treasury bonds to a fall of more than 6% in the South Korean stock market; Concerns about oil and shares of chip makers shook the Asian market. At a glance, South Korea's Caspian Index fell by more than 6% and reached below 6,000 units. Will the lowest Saudi gas line become a new route for oil transportation? At a glance, Saudi Arabia is considering increasing the oil export capacity from the pipeline route to 10 million barrels in the minutes of the new meeting of the Central Bank of Australia, opening the way to increase the interest rate again.

Goldman Sachs does not expect the planned liberalization of Russian diesel to have a significant impact on global prices. However, according to this bank's estimate, the possible withdrawal of strategic reserves in Europe can cause a more noticeable decrease in prices.

This bank has estimated that the possible release of 50 million barrels of diesel from Europe's strategic reserves can reduce the wholesale price of this fuel in the US Gulf Coast and Europe by about 11 dollars per barrel.

Russia has recently announced that it can increase the supply of diesel to world markets. Russian officials have said that talks with the US government about supply are underway, and Russian diesel exports may reach 3-3.5 million tons by the end of the year. Goldman's assessment shows that this volume is not enough to change the balance of the market, which is facing a severe shortage.

Diesel has been one of the main sources of energy shock since the start of the Iran-related war. Middle East supply disruptions, attacks on refining infrastructure and export restrictions in several countries have pushed prices to new records. Diesel prices in the United States reached about $6.50 per gallon late last month, and prices in Europe also hit records.

Governments have taken action to deal with this situation. Group of Seven members agreed on October 2 to release 100 million barrels of diesel and other reserves through the International Energy Agency within four months. A significant part of the release of diesel is supposed to be done in the first 20 days. Goldman's estimate shows how much the release of European reserves on the scale investigated by this bank can affect prices.

Goldman's new assessment is published in the continuation of a series of analyzes of this bank about the oil products market. The bank said in late September that a U.S. diesel export ban -- which it considered likely but not its baseline scenario -- could lower prices in the U.S. and raise them in Europe.

In a note published earlier this month, Goldman warned that diesel may remain expensive until 2027; Because global refining capacity is struggling to respond to improving demand and rebuild depleted reserves. According to this bank, the profit margin of diesel and jet fuel may exceed 40 dollars per barrel on average next year; More than twice the normal level. Goldman also said that the release of Group Seven reserves will only temporarily reduce market pressure and will not address the structural shortage.

Overall, Goldman's analysis paints a picture of a market where emergency reserves can buy time for the market, but a sustained easing of pressure depends on refining capacity and improved supply from the Middle East.