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US On-Highway Diesel Fuel Prices Fell for the Tenth Time in 11 Weeks

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Diesel fuel prices 

October NY Harbor ULSD futures rose by 0.7% and closed at $1.42 per gallon on September 8, 2016. Prices are trading close to a two-week high despite the large rise in distillate inventories. We’ll look at distillate inventories in Part 10 of this series.

The EIA (U.S. Energy Information Administration) reported that US on-highway diesel fuel prices were down 0.1% to $2.40 per gallon on September 5, 2016—compared to the previous week. Prices fell for the tenth time in the last 11 weeks.

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 $2.58 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 should have a negative impact on US refiners and oil producers such as Comstock Resources (CRK), Triangle Petroleum (TPLM), Valero Energy (VLO), Northern Tier Energy (NTI), and Western Refining (WNR).

Uncertainty 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), the Direxion Daily Energy Bear 3x (ERY), 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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