Oil Comment Solving for Diesel and Gasoline Shortages

Goldman Sachs analyzes the trade-offs between diesel and gasoline production during potential supply disruptions. The report concludes that maintaining safe inventory levels requires a mix of demand destruction, increased refinery utilization, and SPR releases.

Key Takeaways

• 1.Maintaining OECD diesel and gasoline inventories above the critical threshold of 20 days of demand during a persistent Strait closure requires a combination of yield gains, SPR releases, or demand destruction.
• 2.Switching refinery yields toward diesel negatively impacts gasoline supply; a 1pp increase in diesel yield reduces gasoline yield by approximately 0.8pp.
• 3.High refining margins currently boost utilization, with a $10 increase in the 3-2-1 refining margin associated with a 1.3pp increase in global refining utilization.

Table of Contents

• Potential Supply Solvers
• Yield Switching
• Increased Utilization Rate
• Inventory Risk Scenarios
• Appendix
• Team Oil
• Disclosure Appendix

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial