European diesel stockpiles are expected to decline steadily from August and reach roughly 299 million barrels by November, the lowest level for that time of year since at least 2015, according to Morgan Stanley analysts, in a warning that identifies the diesel market as the most acute pressure point in the global oil system.
Analysts including Martijn Rats wrote in a note that the supply-and-demand picture for diesel is “genuinely tight,” according to The Guardian. The analysis was first reported by Bloomberg.
“The real bottleneck in the oil system right now is refining, more so than crude,” the analysts wrote. “The epicenter of all this is the diesel market, and Europe in particular.”
The bank’s modeling projects that European inventories will fall to multi-year lows toward year-end. The projected November low of about 299 million barrels would mark the lowest seasonally adjusted stockpile level since at least 2015, Morgan Stanley said.
The warning comes as global energy markets grapple with the impact of renewed conflict in the Middle East, The Guardian reported. The projection adds to concerns that energy-market disruptions are shifting from crude oil production to the availability of refined products that power trucks, trains, and heating systems across the continent.