BAKU, Azerbaijan, June 13. BMI, a Fitch Solutions company, projects the global diesel price for 2024 to average at USD 107 per barrel, down from the previous forecast of USD 110 per barrel, Trend reports.
Diesel prices are expected to decline in Q2 2024 before rising again in Q4 2024 with the onset of winter. However, BMI maintains a bearish outlook on diesel prices for 2024, as the incremental seasonal demand growth is unlikely to alleviate the global supply glut.
This bearish outlook is supported by a continued slowdown in Europe's largest diesel market and structural weaknesses in US diesel consumption. Weakening diesel prices in May 2024 across three key trading regions suggest that the market remains oversupplied. The prospects for a strong recovery in diesel prices in Q3 2024 are limited, as oversupply will likely continue to suppress prices unless refiners reduce production.
US diesel prices are expected to maintain premiums over Asian and European prices in 2024. In Q2 2024, spot diesel prices in New York traded at a premium over Rotterdam and Singapore. ULSD New York diesel prices averaged around USD 115 per barrel in April 2024 but declined to USD 106 per barrel in the first two weeks of May 2024. Despite this decline, premiums over Rotterdam and Singapore prices strengthened, with the premium over Singapore widening to an average of USD 4.1 per barrel in early May 2024. Prices are expected to remain under pressure as US refiners continue to increase production since late March 2024. In Singapore and Rotterdam, prices for 10ppm grade diesel continued to slide below USD 100 per barrel in May, further widening their discounts to New York gasoil prices.
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