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Analyzing the EIA's Latest US Crude Oil Inventory Report

PART:
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Part 5
Analyzing the EIA's Latest US Crude Oil Inventory Report PART 5 OF 7

How US On-Highway Diesel Fuel Prices Hit 2016 Highs

Diesel fuel prices  

The EIA (U.S. Energy Information Administration) reported that US on-highway diesel fuel prices rose by 3% week-over-week and closed at $2.26 per gallon on May 2, 2016. Diesel fuel prices rose for the fourth straight week. This was the highest level so far in 2016.

However, prices have fallen 26% compared to the corresponding period in 2015. Prices are lower than last year due to milder-than-normal winter weather in 2015 and 2016 compared to 2014 and 2015.

How US On-Highway Diesel Fuel Prices Hit 2016 Highs

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Heating oil and diesel fuel price forecast for 2016 

The EIA forecast that US on-highway diesel fuel prices will average around $2.11 per gallon in 2016. It estimates that prices will further rise to $2.33 per gallon in 2017.

The government agency forecast that heating oil could average around $1.97 per gallon in 2016 and $2.18 per gallon in 2017. US distillate inventories are key drivers of diesel fuel and heating oil prices. Distillates consist of diesel fuel and heating oil. Read the last part of this series to learn more about US distillate inventories.

Impact on energy stocks and ETFs 

Higher gasoline and diesel fuel prices benefit US refiners such as Tesoro (TSO) and Northern Tier Energy (NTI). High crude oil prices also benefit oil and gas exploration and production companies such as Laredo Petroleum (LPI), Energy XXI (EXXI), and Triangle Petroleum (TPLM).

The roller coaster ride in oil and gas prices also affects ETFs and ETNs such as the PowerShares DWA Energy Momentum ETF (PXI), the VelocityShares 3x Inverse Crude Oil ETN (DWTI), and the United States 12 Month Oil ETF (USL).

Read the next part of the series to learn about gasoline inventories.

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