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US On-Highway Diesel Fuel Prices Fell Again

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Diesel futures prices  

October NY Harbor ULSD futures fell by 2.1% and settled at $1.38 per gallon on September 14, 2016. Prices are trading close to four-week lows due to the larger-than-expected rise in distillate inventories. We’ll look at distillate inventories in Part 10 of this series.

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US on-highway diesel fuel prices

The EIA (U.S. Energy Information Administration) reported that US on-highway diesel fuel prices were down 0.4% to $2.39 per gallon on September 12, 2016—compared to the previous week. Prices fell for the 11th time in the last 12 weeks.

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

Heating oil and diesel fuel price forecasts for 2016  

The EIA reported that heating oil prices could average $2.11 per gallon in 2016 and $2.58 per gallon in 2017. Similarly, on-highway diesel fuel prices will likely average $2.31 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 could have a negative impact on US refiners and oil producers such as Comstock Resources (CRK), Valero Energy (VLO), Northern Tier Energy (NTI), and Western Refining (WNR).

The rollercoaster ride in crude oil and gasoline prices also 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 final part of this series, we’ll take a look at US distillate inventories.

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