Goldman Sachs commodity research co-head Daan Struben said US diesel inventories
could fall to a critical roughly 20 days’ supply by August if commercial crude
stocks keep declining at recent rates while the Strait of Hormuz is effectively
closed. He said US oil stocks have registered the largest eight-week drop on
record and diesel inventories are at their lowest since 2003. Conflict involving
Iran has cut Persian Gulf shipments through the Strait to near zero, forcing
millions of barrels of output offline. US refineries can bridge the gap by
drawing down stocks, but a prolonged disruption would tighten the market
sharply. EIA data show diesel coverage was about 28 days in the week to May 22,
down from roughly 36 days at end-January.
