Jarrett Renshaw, Reuters, discusses diesel supplies here…
“Thanks to surprising summer demand, particularly from exports, inventories of diesel, jet fuel and heating oil were heading into the busy winter at their lowest levels in three years….
Harvey’s effects cost refiners even more production of fuel, raising the possibility of shortages and higher prices if the United States suffers another major disruption or an unexpectedly frigid winter….
U.S. distillate stocks are now at three-year lows for this time of year, and 5.2 percent below their historical average…
The inventory also sets the stage for a bullish run in the diesel market. The 3-2-1 crack spread CL321-1=R, a measure of the profit refineries make from converting three barrels of oil into gasoline and diesel, is at $20.63 a barrel, the highest level seasonally since 2012, and more than $6 above the average during that time.”
Here are distillate stocks compared to the 5 year range from the EIA:
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