Goldman Sachs shifts fuel call to gasoline, sees upside into mid-2027

September 17, 2026 at 09:14 AM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

Goldman Sachs closed its diesel timespread recommendation and now recommends a long position in European gasoline for mid-2027, citing refiners' shift from gasoline to diesel output. The bank said gasoline offers more upside price opportunities than diesel, which has already hit record US futures and retail prices. The move comes as global fuel markets tighten from US-Iran conflict and Russia-Ukraine war refinery damage.

Key Facts

Goldman Sachs closed its diesel timespread recommendation and opened a long position in European gasoline for mid-2027.
The bank's analysts cited refiners' switching output from gasoline to diesel as rapidly tightening gasoline markets.
US diesel futures have settled at a record and average retail pump prices for diesel hit an all-time high.
Goldman Sachs said refinery outages were 60% higher than the seasonal average as of the end of August.
The bank's analysts include Yulia Zhestkova Grigsby and Daan Struyven, and the note was dated September 16.

Recommendation Shift

Goldman Sachs closed its earlier call for gains between different diesel contracts, or timespreads, and recommended a long position in European gasoline for mid-2027. The bank's commodity analysts, including Yulia Zhestkova Grigsby and Daan Struyven, said gasoline offered more upside price opportunities than diesel. They cited more resilient demand and relative shifts in stockpiles as reasons for the switch. The recommendation was made in a note dated September 16.

Diesel Market Tightness

US diesel futures have settled at a record, and average retail pump prices for the fuel have rallied to an all-time high. Goldman Sachs said diesel is at the epicenter of the fuel supply crunch, with the lowest global refining activity for this time of year since the 2020 pandemic. War-induced refinery outages in the Middle East and Russia have collapsed global fuel supply, especially diesel. Increased output in the Americas and Africa has offset only about a third of lost supply, according to Goldman Sachs. Refinery outages were 60% higher than the seasonal average as of the end of August, and the bank expects diesel tightness to extend into next year.

Gasoline Upside

The key reason for the new recommendation is that refiners' switching output from gasoline to diesel is rapidly tightening gasoline markets. Global fuel markets have been squeezed this year by the combined impact of the US-Iran conflict and the war between Russia and Ukraine, with Kyiv pummeling Moscow's refineries. While diesel may yet climb further, gasoline now offered more upside price opportunities, the analysts said.