Morgan Stanley: European diesel supply tightening pressure or deepening

Morgan Stanley noted that, as a result of a combination of major supply challenges, Europe was facing a contraction in the supply of diesel fuel, and that the region was experiencing a record high in refining oil, while stocks continued to decline. In a report dated 19 July, the analyst Martin Rats stated: “The current situation is indeed very tense, and our supply and demand model shows that European diesel stocks will fall to the lowest levels in many years by the end of the year”. He noted that “the real bottleneck in the current oil system is in refining oil, not crude oil”. In addition, some of Africa's oil goods have not yet been sold, and forward prices have shown a downward trend in some regions of the market, with analysts emphasizing: “The centrepiece of all this is the diesel market, particularly in Europe”