BMI analysts revealed, in a BMI report despatched to Rigzone by the Fitch Group lately, that that they had lowered their 2025 common international diesel worth forecast to $89 per barrel, “reflecting bearish sentiment dominating the market”.
In response to the report, BMI expects the common international diesel worth to come back in at $87 per barrel in 2026, $85 per barrel in 2027, $84 per barrel in 2028, and $82 per barrel in 2029. The common international diesel worth averaged $105 per barrel in 2024, the BMI report confirmed.
“International provide continues to outpace demand throughout key areas, exerting downward stress on costs,” BMI analysts mentioned within the report.
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“Easing geopolitical tensions within the Center East have contributed to weaker crude costs, which in flip are weighing on diesel costs,” they added.
“Diesel briefly strengthened following a spike in crude oil and refinery closures in Europe. Nonetheless, we count on European diesel costs to melt in This autumn 2025 regardless of seasonal winter demand,” they continued.
The BMI analysts famous within the report that their outlook “stays bearish for 2025 and 2026, as decrease crude costs and modest seasonal demand are unlikely to soak up the prevailing provide glut”.
“This view is supported by ongoing financial weak point in Europe – the world’s largest diesel market – and structural softness in diesel consumption within the U.S. and Asia”.
The analysts highlighted within the report that, in July, Extremely Low Sulphur Diesel costs in New York averaged about $101 per barrel earlier than easing to $98 per barrel in September, including that the premium over Singapore “widened to roughly $10 per barrel”.
“Singapore and Rotterdam 10ppm costs fell under $85 per barrel, widening their reductions to New York,” they added.
The BMI analysts went on to state within the report that international diesel demand is anticipated to be pushed primarily by non-OECD development, “with Asia accounting for many of the improve”.
“Within the U.S., demand stays resilient, supported by easing retail costs,” they analysts mentioned.
“In response to the EIA’s [U.S. Energy Information Administration] weekly knowledge, diesel demand recovered within the first two weeks of October 2025, with complete demand rising 20 % week on week to 4.3 million barrels per day; nevertheless, it stays under the extent recorded in the identical interval of 2024,” they added.
“We preserve a constructive demand outlook for This autumn 2025 and Q1 2026, underpinned by decrease wholesale and retail costs, although it stays to be seen whether or not this energy will persist by 2025 or develop right into a sustained bullish pattern in 2026,” they continued.
Trying on the “provide aspect” within the report, the BMI analysts said that U.S. refineries “have reduce diesel output sharply – from 5.3 million barrels per day within the second week of August 2025 to under 4.6 million barrels per day in early October 2025”.
“Given elevated inventories, it’s unlikely that refiners will ramp up manufacturing within the close to time period until refining margins enhance,” they warned.
In a BMI report despatched to Rigzone by the Fitch Group again in February, BMI projected that the worldwide diesel worth would common $93 per barrel in 2025, $92 per barrel in 2026, and $91 per barrel throughout 2027, 2028, and 2029. That report confirmed that the worldwide diesel worth averaged $99 per barrel in 2024 and $111 per barrel in 2023.
“Brief-term diesel costs are anticipated to stay supported on account of potential refinery closures in Europe, growing working capability within the U.S., and optimization of diesel manufacturing by refiners in Mainland China,” BMI analysts said in that report.
“We count on international diesel demand to be pushed primarily by consumption development in non-OECD international locations, with a lot of this development occurring in Asia,” they added.
To contact the writer, e mail andreas.exarheas@rigzone.com
