Goldman Sachs: U.S. Diesel Supply Tightness in August at Worst Level Since 2003
On June 2, Goldman Sachs Group's co-head of global commodities research, Daan Struyven, stated that if commercial crude oil inventories continue to decline at the recent pace with the Strait of Hormuz nearly completely closed, U.S. diesel stocks could fall to a critical level that can only sustain 20 days of supply by August. 'The past eight weeks have seen the largest historical decline in U.S. oil inventories. Diesel stocks in the U.S. have dropped to their lowest level since 2003.' The Iran conflict has fundamentally altered the global oil market landscape, with oil transport from Gulf producers through the Strait of Hormuz significantly reduced, nearly to zero, resulting in millions of barrels of oil production being forced offline. Although U.S. refineries can use inventories to fill this gap, the potential turning point will become increasingly severe if this shipping route remains obstructed. Struyven noted, 'This tightness will also be significantly reflected in the U.S.' According to the U.S. Energy Information Administration, as of the week ending May 22, U.S. diesel supply was approximately at a 28-day reserve, down from about 36 days at the end of January.
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