Goldman Sachs: Refineries struggle to meet demand, diesel prices will remain elevated through 2027.

Goldman Sachs said diesel prices may remain elevated through 2027, driven by limited refining capacity, recovering demand, and restocking by governments and companies. Nikhil Bhandari, co-head of Asia-Pacific natural resources research at Goldman Sachs, said on Monday: "We need to keep refined product prices at a high enough level to ensure a certain degree of demand destruction persists next year." The bank believes keeping diesel prices high is a necessary measure to prevent recovering demand from overwhelming already constrained refining capacity. Goldman Sachs forecasts that the average crack spread for global diesel and jet fuel in 2027 will exceed $40 per barrel, more than double the typical level of about $20. Meanwhile, Goldman Sachs expects Brent crude prices to stabilize around $80 per barrel as crude oil shipments through the Strait of Hormuz gradually recover. Bhandari said: "If there is any demand rebound next year, the global refining system will have to reach its highest utilization rate in the past two decades."