Diesel in the money again

Fuel stocks are easing and margins rising, though the rally might be short

AFTER a lengthy diesel glut on both sides of the Atlantic and pressurised margins, fundamentals have finally started to improve for the road fuel. Refiners' profits are rising again. In Europe, the ultra-low sulphur diesel crack spread against Brent crude - the profit to be made by refiners - is now around $14 a barrel, according to pricing pricing-agency Platts. In early April it was just $8/b. Gradual stock draws and falling supplies are behind the rise in Europe and analysts expect the trend to continue. Profit share Margins for producing diesel on the US Gulf Coast are also forecast to keep strengthening, averaging $11/b next year compared with $9/b in 2016. Global diesel supplies rose b