SPulling together the
factors influencing diesel supply and demand in the Atlantic Basin, we begin
with demand for transportation fuels in
mentioned, even with no further increase in penetration of diesel vehicles,
the ratio of diesel to gasoline demand will
grow as the fleet continues to change, moving toward the penetration rate.
gas concerns may also impact diesel demand.
The EU set a target goal for CO2 reduction for road transportation, and has been relying
on a voluntary plan by automakers to achieve
that goal. Despite some progress,
mostly stemming from the switch from gasoline to diesel-fueled vehicles, it is clear that progress is
insufficient to achieve their goal.
–It now seems
that mandatory requirements will be next.
Discussions indicate more vehicle efficiency
requirements may be on the slate. But even with increased efficiencies, new
car penetration is slow to impact total
the interest in reducing sulfur in ocean-going vessel fuels, bunker fuel may
be replaced with distillate – increasing
distillate demand even more.
SNow look at the
factors point to higher growth of diesel in the U.S. than for gasoline. Diesel fuel demand growth has been mainly due to increased demand from heavy-duty
–There may be
some growth in the light-duty market, but it seems diesel penetration will
initially be in the heavier end of this
light-duty market – the heavier luxury cars and SUV’s for example. This
could help push up diesel growth relative to gasoline growth.
general efficiency improvements for gasoline fueled vehicles will have a small
impact on demand before 2010, but after
2010, efficiency gains could begin to affect gasoline demand growth.
–As in the
case of Europe, any shift to distillate for ocean-going vessels would also add
to U.S. diesel demand.