EIA Bumps Up USA Diesel Price Forecast
by Andreas Exarheas
click here to read the original article at Rigzone.com
*this article was not written by Roseland Oil & Gas
The U.S. Energy Information Administration (EIA) has raised its U.S. diesel price forecast for 2023 and 2024 in its latest short term energy outlook (STEO) report, which was released last week.
The EIA now sees U.S. on-highway diesel fuel prices averaging $4.31 per gallon this year and $4.07 per gallon next year. In its previous STEO, which was released in August, the EIA projected that on-highway diesel fuel prices would come in at $4.17 per gallon in 2023 and $3.94 per gallon in 2024.
September’s STEO put the 2022 on-highway diesel fuel price at $5.01 per gallon, while the August STEO put this figure at $5.02 per gallon.
Broken down quarterly, the EIA’s September STEO sees the on-highway diesel price averaging $4.25 per gallon in the third quarter, $4.68 per gallon in the fourth quarter, $4.35 per gallon in the first quarter of next year, $4.06 per gallon in the second quarter, $3.88 per gallon in the third quarter, and $4.00 per gallon in the fourth quarter.
In its August STEO, the EIA projected that the on-highway diesel price would average $4.05 per gallon in the third quarter, $4.30 per gallon in the fourth quarter, $4.10 per gallon in the first quarter of 2024, $3.92 per gallon in the second quarter, $3.80 per gallon in the third quarter, and $3.93 per gallon in the fourth quarter.
“We raised our diesel price forecast because of higher than expected August diesel crack spreads (the price of a gallon of diesel minus the price of a gallon of crude oil) and our expectation for lower distillate inventories in the fall,” the EIA noted in its September STEO.
“Announced maintenance at the Irving Oil refinery in St. John, New Brunswick, and at the Monroe Energy refinery in Trainer, Pennsylvania, will reduce distillate fuel oil supplies to the East Coast,” the EIA added.
“Total distillate inventories in the United States have been well below average since last year, and we currently estimate U.S. distillate inventories will decline by about 11 million barrels in October, more than the average October draw from 2018–22 of nearly 8million barrels, largely because of the maintenance,” the EIA continued.
The EIA stated in the STEO that the draw will contribute to additional increases in the distillate crack spread in October, “which we estimate will average $1.29 per gallon, a 31-cent increase compared with the August STEO”.
“Both seasonal increases in demand along with refinery maintenance will reduce distillate inventories. Increased seasonal demand will also reduce inventories,” the EIA said.
“East Coast distillate demand tends to increase in the winter months because many households in the U.S. Northeast use distillate heating oil, while Midwest distillate demand tends to increase in September and October because of agricultural demand associated with the harvest season,” it added.
“Refinery maintenance and increased end-of-year distillate consumption are typical in most years, but our outlook for higher distillate crack spreads also reflects low global distillate inventories,” the EIA went on to state.
The EIA’s latest gasoline and diesel fuel update at the time of writing, which was released on September 11, shows a rising price trend in U.S. on-highway diesel fuel prices.
These prices were $4.475 per gallon on August 28, $4.492 per gallon on September 4, and $4.540 per gallon on September 11, the EIA fuel update showed.
As of September 18, the average diesel price in the U.S. is $4.575 per gallon, according to the AAA Gas Prices website. Yesterday’s average was $4.571 per gallon, the week ago average was $4.475 per gallon, the month ago average was $4.347 per gallon, and the year ago average was $4.960 per gallon, the site highlighted.
by Andreas Exarheas
click here to read the original article at Rigzone.com
*this article was not written by Roseland Oil & Gas