US distillate inventories
The EIA (U.S. Energy Information Administration) estimates that US distillate inventories fell by 3.2 MMbbls (million barrels) to 144.5 MMbbls from September 1 to 8. Inventories fell 2.2% week-over-week and 18.2 MMbbls, or 11.2%, year-over-year. US distillate inventories fell for the second straight week.
A market survey estimated that US distillate inventories would have fallen 1.5 MMbbls from September 1 to 8. US diesel futures rose 1.6% to $1.76 per gallon on September 13. Prices rose due to the larger-than-expected fall in the distillate inventories.
Diesel and US crude oil (SCO)(USL)(PXI) futures rose on September 13. Higher diesel and crude oil prices have a positive impact on the earnings of refiners and producers such as Valero (VLO), Western Refining (WNR), Marathon Petroleum (MPC), Carrizo Oil & Gas (CRZO), and Cobalt International Energy (CIE).
US distillate production, imports, and demand
US distillate production fell by 519,000 bpd (barrels per day) to 3.9 MMbpd (million barrels per day) from September 1 to 8. Production fell 11.5% week-over-week and 960,000 bpd, or 20%, year-over-year.
US distillate imports rose 26,000 bpd to 136,000 bpd from September 1 to 8. Imports rose 24% week-over-week but fell by 4,000 bpd, or 0.3%, year-over-year.
US distillate demand fell by 6,000 bpd to 4.1 MMbpd from September 1 to 8. Demand fell 0.1% week-over-week but rose by 781,000 bpd, or 24%, year-over-year.
US distillate inventories are within their five-year range. They’re down by 9 MMbbls or 6% in the last ten weeks. A fall in distillate inventories could support diesel and crude oil (XLE)(XOP) prices.
See Why Were Crude Oil Price Forecasts Downgraded Again? for more on crude oil price forecasts.
For updates on natural gas, read Hurricane Harvey Has Impacted Natural Gas Supplies and Prices.