EIA’s US distillate inventories
The EIA estimates that US distillate inventories increased by 0.5 MMbbls (million barrels) to 129.4 MMbbls on March 23–30, 2018. US distillate inventories increased for the first time in the last eight weeks. However, the inventories dropped by 22.8 MMbbls or 15% from a year ago.
Analysts estimated that US distillate inventories could have declined by 1.1 MMbbls on March 23–30, 2018. The surprise build in US distillate inventories pressured diesel and oil prices on April 4, 2018.
US diesel futures fell 0.9% to $1.97 per gallon on April 4, 2018, while US crude oil futures fell 0.2% to $63.37 per barrel on the same day. The United States 12 Month Oil Fund (USL) rose 0.2% to $22.28 on April 4, 2018. USL follows WTI crude oil futures.
The ProShares Ultra Bloomberg Crude Oil ETF (UCO) rose ~0.1% to 26.3 on April 4, 2018. UCO targets to provide twice the daily return of an index of US oil futures contracts.
US distillate production and demand
US distillate production increased 3.5% to 5,016,000 bpd (barrels per day) on March 23–30, 2018, according to the EIA. The production also increased by 49,000 bpd or 0.9% from a year ago.
US distillate demand fell 11.2% to 3,887,000 bpd on March 23–30, 2018. The demand also declined by 211,000 bpd or 5.1% from a year ago.
US distillate inventories were ~3.1% below their five-year average, which is bullish for diesel and WTI oil prices. If distillate inventories rise above the five-year average, it could be bearish for diesel and crude oil prices.
Read Are OPEC and US Crude Oil Inventories Helping Oil Bulls? and US Natural Gas Futures Close to 3-Week High: What’s Next? for the latest updates on oil and gas.