Diesel fuel prices
September NY Harbor ULSD futures rose by 3% and settled at $1.29 per gallon on August 3, 2016. Prices rebounded from four-month lows despite the increase in distillate inventories. We’ll look at distillate inventories in Part 9 of this series.
On August 3, 2016, the EIA (U.S. Energy Information Administration) reported that US on-highway diesel fuel prices fell by 1.3% to $2.35 per gallon on August 1, 2016—compared to the previous week. Prices fell for the seventh consecutive week.
US on-highway diesel prices hit $2.43 per gallon for the week ending June 13, 2016—the highest level so far in 2016.
Heating oil and diesel fuel prices forecast for 2016
The EIA estimates that heating oil prices could average $2.16 per gallon in 2016 and $2.64 per gallon in 2017. Likewise, on-highway diesel fuel prices will average $2.36 per gallon in 2016 and $2.71 per gallon in 2017.
Heating oil and diesel fuel prices are driven by US distillate inventories. Distillates consist of diesel fuel and heating oil. Please read the last part of this series to learn more about US distillate inventories.
Impact on energy stocks and ETFs
High gasoline, diesel fuel, and crude oil prices have a positive impact on US refiners and oil producers’ earnings such as Goodrich Petroleum (GDP), Synergy Resources (SYRG), and Western Refining (WNR).
The rollercoaster ride in crude oil and gasoline prices impacts ETFs and ETNs such as the VelocityShares 3x Long Crude Oil ETN (UWTI), the United States Gasoline Fund (UGA), and the ProShares UltraShort Bloomberg Crude Oil ETF (SCO).
In the next part of this series, we’ll take a look at gasoline inventories.