Back in late July, these were the top stories of the week:
The US distillate fuel story is still with us. This graphic was posted August 8, 2020:
US distillate inventories:
Last night, Focus on Fracking:
The EIA reported 1,418,000 more barrels of oil production per day in May than was actually produced; natural gas prices rose by most in any week since 2009; distillates supplies at a third straight 38 year high; oil rig count now lowest in 15 years.
...at the same time, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 126,000 barrels per day to 4,909,000 barrels per day, after our distillates output had decreased by 20,000 barrels per day over the prior week
... after this week's increase in distillates output, our distillates' production was 7.1% less than the 5,286,000 barrels of distillates per day that were being produced during the week ending August 2nd, 2019
.... similarly, with the increase in our distillates production, our supplies of distillate fuels increased for the fifteenth time in 29 weeks and for the 20th time in 44 weeks, rising by 1,591,000 barrels to another 38 year high of 179,977,000 barrels during the week ending July 31st, after our distillates supplies had increased by 503,000 barrels over the prior week
....our distillates supplies rose again this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 65,000 barrels per day to 3,700,000 barrels per day, because our exports of distillates fell by 111,000 barrels per day to 1,113,000 barrels per day while our imports of distillates fell by 17,000 barrels per day to 131,000 barrels per day...after this week's inventory increase, our distillate supplies at the end of the week were 30.9% above the 137,451,000 barrels of distillates that we had in storage on August 2nd, 2019, and about 27% above the five year average of distillates stocks for this time of the year...
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Why Are Distillate Volumes So High Right Now?
Which reminds me. When this was first being reported, I asked the question why might distillate fuels being rising so much? This might be complicated to follow my thought process on this but I bet I'm correct.
When we lived in Germany, we heated our house with heating oil. We learned that the Germans bought they heating oil and filled their tanks in the summer when prices were lowest. When the weather started turning cooler, and in the dead of winter, distillate fuel prices rose astronomically. Those with the extra money during the summer were able to fill their tanks. And folks tried estimating how much they would need to get through the winter.
Now, with so many folks laid off, especially in the New England and northern Atlantic states, my hunch is that a lot of folks don't have the cash to buy heating oil that they will not need until November or December, or later.
Likewise, if restaurants, bars, and other mom-and-pop retail establishments are shut down, there is probably little incentive to fill the heating oil tanks during the pandemic.
Exports have also dropped, and that would be for the same reason. Folks without jobs, without money, can't buy heating oil right now, here in the states, or overseas.
