Goldman sees initial US diesel price drop from export ban

Goldman Sachs said Saturday that a US diesel export ban would initially put moderate downward pressure on diesel prices, with export restrictions such as quotas being a plausible scenario. President Donald Trump voiced support Tuesday for banning US diesel exports, though Energy Secretary Chris Wright said Wednesday such a ban would not work and could raise gasoline and kerosene prices. Goldman estimated that, while storage capacity remains available, each week of a diesel export ban would cut average US retail diesel prices by about 25 cents per gallon, or nearly 4% from the current $6.50 level. However, once diesel inventories fill up, each week of the ban would likely push US retail gasoline prices up by 30 cents per gallon, as diesel, gasoline, and kerosene are largely produced jointly. The brokerage also projected European wholesale diesel prices would rise $3 per barrel weekly during the ban, though draws on European strategic reserves could offset about half of that increase. Goldman added that once the ban is lifted, US diesel prices would realign with global markets, pushing US prices up and foreign prices down.