Petrobras rejects extra diesel orders as prices in Brazil lag global market

Petrobras is refusing requests from fuel distributors for additional diesel volumes as domestic diesel prices trade at a record discount to global levels, according to four sources. The decision may tighten domestic supply for distributors, pressure margins and prompt increased diesel imports or rationing in Brazil. This is a sector-level negative for fuel distributors and could move Petrobras and regional fuel spreads.

Analysis

Petrobras is refusing requests from fuel distributors for additional diesel volumes as domestic diesel prices trade at a record discount to global levels, according to four sources. The decision may tighten domestic supply for distributors, pressure margins and prompt increased diesel imports or rationing in Brazil. This is a sector-level negative for fuel distributors and could move Petrobras and regional fuel spreads.