It is important to note that last year’s export rate was lower than normal. So far this year, distillate exports have averaged 1.240 million bpd compared to 986,000 bpd during the same period last year. Since Russia’s invasion of Ukraine, the U.S. also ended its importation of crude and refined fuels from Russia.Ĭhart 4: Cost Management Solutions Click to expand. Europe is seeking supply from other countries to supplant what it once got from Russia. With the war in Ukraine, supply chains are disrupted. In addition to crude and natural gas, Russia also built refineries and provided refined fuels. Still, the West did not slow its use and instead became more dependent on countries like Russia for supply. Hydrocarbon production has become taboo in the West, and there has been a lack of investment in it generally. There is a shortage of distillates globally for many reasons. Thus, the focus on total distillates now. Heating oil inventory used to run more than 50 million barrels, but is now at around 8 million barrels.

Refiners simply provided lower-sulfur product to their heating oil customers. Heating oil has more than 500 parts per million of sulfur. When refiners had to change processes to meet new over-the-road diesel specs several years ago, they started yielding less high-sulfur distillates. We focus on all distillates rather than heating oil because heating oil is less than 10 percent of the total.Ĭhart 2: Cost Management Solutions Click to expand. Its low level is why some are predicting we will “run out” before the end of the year. So, there are good reasons we are all concerned and asking questions.Ĭhart 2 looks at total distillates inventory for the U.S. Even though we may not be a heating oil retailer or a refined fuels distributor, we know the high cost of distillates is hurting our economy, a major contributor to inflation, and stands in the way of more economically secure times. When we see the price of a commodity that out of whack with the comparable energy sources, we know something is up. It has been as high as the equivalent of $3.39 per gallon of propane this year.

That is the equivalent of $2.53 per gallon propane, which is trading at 88.5 cents as we write. And, of course, we all see the high price of distillates and know something is up.Ĭurrently, the price of heating oil/distillates is $3.83 per gallon. will be out of distillates by the end of the year. Everyone is hearing the claims that the U.S. But there have been plenty of inquiries from propane dealers as well. Some of our readers market heating oil, and others are refined fuels distributors. Recently we have had inquiries about the state of diesel, heating oil and distillates in general. Chart 1: Cost Management Solutions Click to expand.

Low specs experience