Low distillate inventories contribute to higher heating oil price forecast (11/14/2019)

Distillate inventories in the Northeast United States (Petroleum Administration for Defense Districts, or PADDs, 1A and 1B), which include heating oil, were 24.4 million barrels on November 8, 37% below the below their previous five year (2014–18) average (Figure 1). Northeast distillate inventories remained below the previous five-year average every week this year, but remained within the previous five-year range until late-September when inventories in the Northeast fell below this range. Customers in the Northeast rely on heating oil more than in any other region; about 20% of households in this region use heating oil for space heating. Pricing dynamics in distillate futures are currently consistent with low inventory levels. The U.S Energy Information Administration (EIA) believes that heating oil prices will likely increase and revised its heating oil price forecast up in the November Short-Term Energy Outlook (STEO) to reflect the current supply tightness in the Northeast. ... More »