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US On-Highway Diesel Fuel Prices Trade near 2016 Highs

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Jun. 30 2016, Updated 3:05 p.m. ET

Diesel fuel prices  

The EIA (U.S. Energy Information Administration) reported that US on-highway diesel fuel prices fell by 0.4% week-over-week to $2.42 per gallon on June 20, 2016. Diesel fuel prices fell for the first time in the last ten weeks. It hit $2.43 per gallon for the week ending June 13, 2016—the highest level so far in 2016.

Diesel fuel prices had fallen 17%—compared to the same period in 2015. Warmer-than-normal winter weather in 2015–2016 compared to 2014–15 led to lower diesel prices.

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Heating oil and diesel fuel price forecast for 2016 

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. The EIA added that heating oil could average around $2.16 per gallon in 2016 and $2.61 per gallon in 2017.

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 benefit US refiners like Western Refining (WNR) and Northern Tier Energy (NTI). Likewise, high crude oil prices also have a positive impact on oil and gas producers like Laredo Petroleum (LPI) and Halcon Resources (HK).

The ups and downs in oil and gas prices also impact ETFs and ETNs such as the ProShares Ultra Bloomberg Crude Oil (UCO), the DB Crude Oil Double Short ETN (DTO), the Direxion Daily Energy Bear 3x (ERY), 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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