Morgan Stanley thinks so:
Product markets are showing signs of outright tightness, particularly middle distillates. This is feeding into crude markets which are looking more balanced in 2018. We are raising oil price forecasts modestly. The real winners though are refiners, and we see value in margins and crack spreads.
Strong demand is driving product markets into tightness, particulary middle distillate: The strength in oil demand has been a key highlight this year. By now some product markets are starting to look outright tight. This is particularly the case for middle distillates (diesel, jet fuel,heating oil), where all indicators are liningup: observable inventories have been falling counter-seasonally and expressed in days-of-demand are close to five-year averages, crack spreads are strong and forward curves are getting deeper into backwardation. With a seasonal acceleration in demand ahead, the middle distillate balance could get even tighter over the winter.
