Oil and diesel prices are making measured gains within a tight trading range, driven by geopolitical developments and economic dynamics. The Russia-Ukraine conflict, Middle East tensions, and China’s policy changes are key factors influencing market sentiment.
Diesel prices are supported by global supply constraints, with European refinery maintenance and reduced flows from Russia contributing to higher prices. Additionally, hydrocracking margins are being strained by price fluctuations in some markets.
Market activity is cautious but neutral, with financial positioning in oil futures stabilizing. While geopolitical risks and supply disruptions remain high, economic uncertainties and potential policy shifts in the U.S. are keeping prices rangebound.
Overall, Citi Research concludes that crude and diesel prices are unlikely to break out of their current range in the near term, as various factors continue to balance each other out in the market.