The U.S. Energy Information Administration (EIA) expects that low inventories of distillate fuels, which are primarily consumed as diesel fuel and heating oil, will lead to high prices through early 2023. According to EIA’s November Short-Term Energy Outlook (STEO), diesel prices will remain higher than $5 per gallon the remainder of the year, and bills for homes that use heating oil will increase by 45% this winter season compared with last winter.
U.S. inventories of distillate fuels finished October at their lowest levels in any October since 1951.
“Inventories are just one part of the supply equation for diesel and other distillates,” said EIA Administrator Joe DeCarolis. “The distillate fuels in storage aren’t the only source of diesel we have to keep trucks and trains moving, but lower-than-average storage levels will contribute to higher costs for diesel and for heating fuels through the winter.”
EIA sees additional uncertainty in the global marketplace for distillates and other fuels as the European Union plans to ban imports of petroleum products from Russia in early 2023.