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US Diesel Futures Are Trading near Their October High

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Diesel futures 

November NY Harbor ULSD futures rose 0.6% and settled at $1.57 per gallon on October 13. Diesel futures rose due to the larger-than-expected fall in distillate inventories. We discuss distillate inventories in the next part of this series. US diesel futures are trading near their October 2016 highs.

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US on-highway diesel and residential heating oil prices

The EIA (U.S. Energy Information Administration) reported that US on-highway diesel fuel prices rose 2.5% to $2.44 per gallon for the week ending October 10.

The EIA also reported that residential heating oil prices rose 2.6% to $2.64 per gallon for the week ending October 10 compared to the previous week.

Heating oil and diesel fuel price forecasts 

The EIA reported that heating oil prices could average $2.12 per gallon in 2016 and $2.60 per gallon in 2017. Heating oil prices averaged $2.65 per gallon in 2015.

On-highway diesel fuel prices will likely average $2.31 per gallon in 2016 and $2.69 per gallon in 2017. Diesel fuel prices averaged $2.71 per gallon in 2015.

US distillate inventories drive heating oil and diesel fuel prices. Distillates consist of diesel fuel and heating oil. Please read the final 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 could have a negative impact on US refiners and oil producers such as Valero Energy (VLO), Tesoro (TSO), Northern Tier Energy (NTI), Warren Resources (WRES), and Western Refining (WNR).

The ups and downs in crude oil and gasoline prices also impact ETFs and ETNs such as the iShares Global Energy ETF (IXC), the iShares U.S. Oil Equipment & Services ETF (IEZ), 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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