New York-US refiners have linked their fortunes so closely to the diesel margin that an expected drop in demand and hike in supply may spark a painful industry consolidation, according to market watchers. "[Product] demand is worse than expected," Mark Flannery, managing director of energy equity research at Credit Suisse Securities, said in an interview. "Something very bad is going to happen" to US refiners, he predicted. For now, US diesel margins are more than $20/barrel versus negative values for gasoline, according to data on Valero Energy's web site.
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