US Distillate Inventories Are near a 7-Year High


Nov. 20 2020, Updated 11:20 a.m. ET

US distillate inventories 

The EIA (U.S. Energy Information Administration) reported that US distillate inventories fell by 0.7 MMbbls (million barrels) to 170.1 MMbbls from February 3–10, 2017. US distillate inventories hit 170.7 MMbbls in the week ending February 3, 2017—the highest level since 2010. Surveys estimated that US distillate inventories would have fallen by 0.7 MMbbls from February 3–10, 2017.

High distillate inventories put a lid on diesel prices. March diesel futures rose 0.5% to $1.63 per gallon on February 15, 2017. Gasoline, crude oil (RYE) (FXN) (ERY), and diesel prices usually move together. Volatility in crude oil and diesel fuel prices impacts US refiners and crude oil producers’ earnings like Valero Energy (VLO), QEP Resources (QEP), Synergy Resources (SYRG), Phillips 66 (PSX), and PDC Energy (PDCE). For more on crude oil prices, read Part 1 of this series.

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Heating oil 

Distillate consists of diesel fuel and heating oil. The EIA reported that US residential heating oil prices were flat at $2.64 per gallon for the week ending February 13, 2017—compared to February 6, 2017.

Distillate production and demand  

US distillate production fell by 271,000 bpd (barrels per day) to 4,531,000 bpd from February 3–10, 2017. US distillate imports rose by 7,000 bpd to 216,000 bpd for the same period. Weekly distillate demand fell by 57,000 bpd to 3,853,000 bpd for the same period.


US distillate inventories are 5% more than they were in the same period in 2016. They’re also above their five-year range. High distillate inventories could pressure diesel fuel, heating oil, and crude oil prices.

Read What Can Investors Expect in the Crude Oil Market in 2017 and Could Donald Trump Be the Biggest Driver for Crude Oil Prices? for more on crude oil prices.

Read Will Crude Oil Prices Test 3 Digits Again and Why Major Banks Upgraded Crude Oil Price Forecasts for more on crude oil price forecasts.

For energy-related analysis, visit Market Realist’s Energy and Power page.


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