Gasoline and diesel prices rose Wednesday after government data showed strong demand for the petroleum products for this time of year, while stockpiles fell more than expected last week.
The amount of crude distillates, such as diesel and heating oil, stored in the U.S. fell by 4.8 million barrels in the week ended Nov. 15, according to the Energy Information Administration.
Analysts polled by The Wall Street Journal had predicted a decline of only 500,000 barrels. [These must be the same analysts that do the weekly unemployment claims projections.]
In the same week, implied demand for distillate fuel rose 14% from the previous week to 4.3 million barrels. It was a six-year high for that week in November. Refiners have been producing large amounts of diesel for export to Europe and Latin America, where it is more widely used.
"Demand for distillates was pretty high last week, and even though gasoline demand dipped below 9 million barrels a day, it's unseasonably high for this time of year," said Carl Larry, president of Oil Outlooks and Opinions, a trading newsletter.
Gasoline use in the U.S. usually tapers in November as early-winter weather in some parts of the country keeps motorists off the road. Stockpiles of gasoline fell by 345,000 barrels last week, more than the 100,000-barrel decline analysts had expected.This is a huge story. In the recent special issue of Bloomberg Businessweek there is a graphic of the amount of diesel being exported overseas. The graphic looks like the graph of Bakken oil production: straight up.