Increased demand and reduced inventories pushed up U.S. distillate prices

According to the US Energy Information Administration (EIA), rising crude oil prices, lower refinery production and increased distillate consumption have led to the highest nominal price of distillates (adjusted for inflation) since 2014
, according to the US Energy Information Administration (EIA).

Distillates are a type of fuel, including diesel and heating oil
.

Demand for distillate fuels in the U.
S.
has been high
since the beginning of 2021 due to increased demand for trucks and rail freight.
In addition, the cold weather in January 2022 led to an increase in the demand for heating oil in the northeast this winter, and nearly 20% of households in the region relied on heating oil for heating
.

Despite increased demand for distillates, distillate production at refineries remains below pre-pandemic levels, in part due to relatively slow
growth in demand for other petroleum products such as motorized gasoline and jet fuel.

As domestic jet fuel demand increases, refiners are shifting more production from fractions to producing more jet fuel
.
The current dynamics of high demand and low production are responsible for
the continued extraction of distillate stocks in the United States.
According to EIA's Weekly Oil Status Report (WPSR) data, distillate inventories on the U.
S.
East Coast stood at 31.
5 million barrels on February 25, 37%
below the average for the same period in the previous five years (2017-2021).

As highlighted in EIA's recent Oil Analysis of the Week, distillate markets in Europe and Asia are experiencing similar trends
in low inventories and high prices.