The recovery of diesel price spreads to crude that started this year will continue in 2018, according to ESAI Energy’s newly published Global Diesel Two-Year Outlook. But the recovery will remain sluggish, as global demand grows slowly. Exporters in Russia and the Middle East will have no trouble keeping up with the growth of Europe’s deficit, while Asian markets will remain similarly well-supplied.

As the Outlook explains, global diesel demand growth will be weaker than the particularly strong annual average of 450,000 b/d in 2011-2015. Exporters should easily cover demand growth in 2017 and 2018.

“Years of investment in refining capacity in Russia and the Middle East will help the European diesel market stay flush in 2018,” says Amrit Naresh at ESAI Energy. “The strongest support for spreads comes from demand growth in India and Latin America, but growth in the rest of the world will be too slow for a robust recovery in spreads.”
Source: ESAI Energy