US Diesel Inventories Plummet to Record Low Ahead of Harvest Season
US diesel inventories have fallen to their lowest level for this time of year on record. Data from the US Energy Information Administration (EIA) shows that distillate stocks, which include diesel and heating oil, declined by 2.2 million barrels to 103.4 million barrels for the week ending August 21.
This is about 14% below the five-year seasonal average and 9.5% lower than the same period last year. Historically, EIA data dating back to August 1982 shows that inventories had never been this low at this point in the year before.
The decline comes despite US refineries operating at a high capacity of 97.4%. Distillate production averaged around 5.1 million barrels per day last week, down from the previous period. Meanwhile, distillate exports rose to 1.79 million barrels per day from 1.6 million barrels a week earlier.
Demand for diesel and heating oil typically strengthens during the fall as farmers increase fuel consumption for harvesting and colder weather lifts heating demand. However, tightening supplies have already pushed prices higher, with the average US retail price for on-highway diesel climbing 19.8 cents from the previous week to $5.652 per gallon.