US On-Highway Diesel Fuel Prices Hit Fresh 2016 Highs
The EIA reported that US on-highway diesel fuel prices rose by 0.8% week-over-week and closed at $2.40 per gallon on June 6, 2016.
Diesel fuel prices
The EIA (U.S. Energy Information Administration) reported that US on-highway diesel fuel prices rose by 0.8% week-over-week and closed at $2.40 per gallon on June 6, 2016. Diesel fuel prices rose for the eighth straight week to the highest level so far in 2016.
However, diesel fuel prices have fallen 16.6%—compared to the same period in 2015. Mild winter weather in 2015–2016 compared to 2014–15 led to lower diesel prices.
Heating oil and diesel fuel price forecast for 2016
In its June STEO (Short-Term Energy Outlook) report, the EIA projects that US on-highway diesel fuel prices will average around $2.34 per gallon in 2016 and $2.69 per gallon in 2017. In its previous edition, the EIA estimated that diesel fuel prices could average $2.27 per gallon in 2016 and $2.64 per gallon in 2017.
In the June STEO edition, the EIA projected that heating oil could average around $2.16 per gallon in 2016 and $2.61 per gallon in 2017. In its previous edition, the EIA estimated that heating oil could average around $2.12 per gallon and $2.55 per gallon in 2016 and 2017, respectively. Diesel fuel and heating oil prices are driven by US distillate inventories. 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
High gasoline and diesel fuel prices support US refiners like Western Refining (WNR) and Tesoro (TSO). High crude oil prices also benefit oil and gas producers like Laredo Petroleum (LPI) and Bonanza Creek Energy (BCEI).
The uncertainty in oil and gas prices also impacts ETFs and ETNs such as the ProShares Ultra Bloomberg Crude Oil (UCO) and the United States 12 Month Oil ETF (USL).
Read the next part of the series to learn about gasoline inventories.