Just as homeowners in the Northeast are thinking about turning the heat back on, the market for heating oil, diesel and other middle distillates in PADD 1 is unusually tight. Inventories are near five-year lows; prices have gone up a lot; and the near-term prospects for rebuilding stocks are modest at best. On the one hand, the region that depends on imports cannot rely on them as much as before; on the other hand, at least a couple of Canadian refineries in the region and nearby that the Northeast has are offline for major changes. In today’s RBN blog, we discuss the latest developments in the PADD 1 distillate market.
Can Houstonians still enjoy, endure? – daytime temperatures in the 90s and nighttime temperatures in the low 70s, but many people in the northern third of the United States have already turned off the air conditioners and begun those inevitable couples’ arguments about when they should turn on the heat. (According to one study, women, on average, would set their thermostat at 77 degrees, while men prefer 71; we won’t take sides or make judgments on this blog.) As shown in Figure 1, less than 5% of the U.S. households use diesel for heating, but its near-twin ultra-low sulfur diesel (ULSD) is used by more than 10% of households in most of the Northeast (states shaded gold, orange, and burgundy), in new england , the share of heating oil ranges from 24% in Massachusetts to a staggering 59% in Maine.
Figure 1. Share of heating oil in the home heating market. Sources: EIA, US Census Bureau
