Diesel Prices to Remain High as Fall Harvest Looms
The U.S. distillate inventories continue to tighten ahead of the fall harvest, putting pressure on diesel costs for farmers and rural businesses. According to the Energy Information Administration data, distillate stocks fell again in mid-August and remain about 13 percent below the five-year average.
Crude oil supplies are less concerning, with commercial crude inventories increasing during the week and remaining near normal seasonal levels. However, refineries operated at roughly 97 percent of capacity, which is a crucial distinction because diesel is only one of several products refiners make from crude oil.
Strong diesel crack spreads signal particularly strong demand or tight supply for the finished fuel. National retail diesel averaged about $5.45 per gallon in mid-August, substantially above year-ago levels. The tight distillate inventories leave less cushion if agricultural and freight demand strengthen through harvest.