Distillate fuel inventories on decline

Distillate fuel inventories are on the decline this year, according to a report released by the Energy Information Administration (EIA).

Officials said distillate fuel supplies, a category that includes both diesel and home heating oil, numbered 117.7 million barrels at the end of June, the lowest end-of-June level since 2004.

EIA estimates American consumption of distillate fuel averaged 4.12 million barrels per day during the first half of 2018, which was 190,000 higher than in the same period of 2017, with officials attributing the increase to a rise in trucking activity, which is the leading use of diesel fuel.

The report acknowledged the demand for trucking services tends to be closely correlated to economic growth and industrial activity, both of which have been higher in the first half of 2018 compared with the first half of 2017, adding cold January temperatures in the Northeast also led to more heating oil consumption.

In January 2018, temperatures in the Middle Atlantic and New England, regions with relatively high shares of homes using heating oil, were 25 percent and 21 percent colder, respectively, than in January 2017.

The EIA maintains the increase in domestic distillate consumption relative to supply has contributed to diesel prices rising by more than crude oil prices over the past year, determining the spot price of Brent crude oil averaged $71 per barrel in the first half of 2018, an increase of $19 per barrel, or 46 cents per gallon from the first half of 2018.