Cold weather helping distillate demand
February 21, 2025
The EIA reported that crude oil stocks in the week ending February 14th built by over 4.6 million barrels. It reported there was no crude oil additions to the SPR in the latest week for the first time since December 2023. The EIA also reported that distillate stocks fell by 2.051 million barrels on the week to 116.6 million barrels. The US four-week average product supplied of distillates fuel oil increased by 64,000 bpd to 4.289 million bpd, the highest level since March 2022. Gasoline supplies were down 150,000 barrels.
The cold weather has helped distillate demand and diesel has been trying to make a push higher but overall, it is still stuck in its range. As we get close to a warmup from very cold temperatures this could lead to some profit taking in ULSD. Distillate supplies are the market where we do have lower inventories as total stocks are 116.56 and last year there were 121.651 and the three-year average is 121.088. So, we are low compared to last year and the three- year range so this does bear watching as spring refinery maintenance and spring demand could offer support to price. But there is work to be done in all these markets to break them out of their ranges. These markets might just need a good sell off to help clean things up and if that is not in the cards then the bulls need to get to work and take it higher.
Propane stocks were down 3.590 million barrels, putting total stocks at 55.268 and last year there were 54.613 million barrels for this reporting week. Midwest stocks were down 1.353 million, this put total stocks at 12.553 million barrels and last year they were 13.475. Gulf Coast stocks were down 2.374 million barrels, putting total stocks at 35.734 and last year they were 31.759 million barrels.