Did Diesel Fuel Prices Rise for the 2nd Straight Week?
Diesel fuel prices
The EIA (U.S. Energy Information Administration) reported that US on-highway diesel fuel prices rose by 1.7% to $2.16 per gallon for the week ending April 18, 2016, compared with the previous week. Diesel fuel prices are 22% lower than in the corresponding period in 2015. US on-highway diesel fuel prices have fallen due to milder winter weather in 2015 and 2016 compared to 2014 and 2015.
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Heating oil and diesel fuel price forecast for 2016
The EIA estimates that ultra-low sulfur diesel, also known as heating oil, could average around $1.97 per gallon and $2.18 per gallon in 2016 and 2017, respectively. The government agency forecasts that diesel fuel prices will average around $2.11 per gallon and $2.33 per gallon respectively, for the same period. Diesel fuel prices and heating oil prices are driven by US distillate inventories. Distillates consist of diesel fuel and heating oil. Read the next part of this series to learn more about US distillate inventories.
Impact on energy stocks and ETFs
Higher prices of gasoline, diesel fuel, and heating oil benefit the margins of US refiners like Delek US Holdings (DK), Alon USA Energy (ALJ), and Northern Tier Energy (NTI). High crude oil prices benefit the margins of oil and gas producers like Swift Energy (SFY), Laredo Petroleum (LPI), Northern Oil and Gas (NOG), and Triangle Petroleum (TPLM).
The roller-coaster ride in crude oil prices influences ETFs and ETNs like the PowerShares DWA Energy Momentum Portfolio (PXI), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), the VelocityShares 3x Inverse Crude Oil ETN (DWTI), and the VelocityShares 3x Long Crude Oil ETN (UWTI).