Cold Weather Fails to Lift Heating Oil Prices
Cold weather has blanketed most of the United States over the past week with record low temperatures hitting a number of upper mid-west states. As the thermometer dropped, prices of natural gas and electricity soared, but heating oil was unable to gain traction as it was mostly dragged down by prices of WTI crude oil.
As the polar vortex covered the mid-west, the south and the north-east, prices of natural gas delivered in the northeast skyrocketed to approximately $40/MMBtu in both New England and NYC. Natural gas at Tetco-M3 in Pennsylvania and Transco Zone 6 Non-New York were even higher.
Despite the cold weather, crude oil prices generated headwinds for heating oil. Production continues to increase and should experience significant growth according to the Department of Energy’s short term energy outlook. The EIA estimates U.S. total crude oil production averaged 7.5 million barrels per day in 2013, an increase of 1.0 million barrels per day from the previous year. Projected domestic crude oil production continues to increase according to the energy department to 8.5 million barrels per day in 2014 and 9.3 million barrels per day in 2015. The 2015 forecast would mark the highest annual average level of production since 1972.
This past week’s inventory estimate showed that refiners were stocking up on products. U.S. commercial crude oil inventories declined by 2.7 million barrels from the previous week. Gasoline inventories increased by 6.2 million barrels last week, while distillate fuel inventories increased by 5.8 million barrels during the same period.
Total products demand over the last four-week period averaged 19.7 million barrels per day, up by 4.3% from the same period last year. Over the last four weeks, gasoline demand averaged over 8.8 million barrels per day, up by 4.8% from the same period last year. Distillate fuel demand averaged over 3.6 million barrels per day over the last four weeks, up by 2.3% from the same period last year.
Sorry. No data so far.