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US On-Highway Diesel Fuel Prices Fell for the Ninth Week

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Diesel fuel prices 

September NY Harbor ULSD futures rose by 2.2% and closed at $1.48 per gallon on August 17, 2016. Prices are trading close to one-month highs despite the increase in distillate inventories. We’ll look at distillate inventories in Part 9 of this series.

On August 17, 2016, the EIA (U.S. Energy Information Administration) released its “This Week in Petroleum” report. It reported that US on-highway diesel fuel prices were down 0.25% to $2.31 per gallon on August 15, 2016—compared to the previous week. Prices fell for the ninth consecutive week.

US on-highway diesel prices hit $2.43 per gallon for the week ending June 13, 2016—the highest level for 2016.

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Heating oil and diesel fuel prices forecast for 2016 

The EIA reported that heating oil prices could average $2.11 per gallon in 2016 and $2.60 per gallon in 2017. Likewise, on-highway diesel fuel prices will likely average $2.30 per gallon in 2016 and $2.70 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 

Lower gasoline, diesel fuel, and crude oil prices in 2016 should have a negative impact on US refiners and oil producers such as Warren Resources (WRES), Valero (VLO), and Western Refining (WNR).

The ups and downs in crude oil and gasoline prices also impact 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. 

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