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Distillate Market Tightness Continues in Northeast


Inventories of distillate fuel remain below seasonally typical levels in the Northeast, a region that includes New England and the Middle Atlantic states.

Stocks of distillate fuel, including both diesel fuel and heating oil, are closely watched in this region, which is home to 80 percent of U.S. households that consume heating oil.

As discussed in the October 11 edition of This Week in Petroleum (TWIP), the pull on distillate supplies from global markets and backwardation in heating oil prices for future delivery have both discouraged inventory builds in the Northeast. More recently, Hurricane Sandy disrupted shipments of petroleum products into the Northeast, further limiting distillate inventory builds. However, additional distillate fuel supplies are likely to become available in the region over the coming weeks with the restart of refineries in the New York Harbor area and an increase in shipments from the Gulf Coast.

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