US DATA: EIA says total US diesel fuel demand jumps to 15-month high

Houston — Ultra low sulfur diesel stocks for all of the US drew for the fifth consecutive week, falling 3.33 million barrels to 145.22 million barrels during the week ended Feb. 12, US Energy Information Administration data showed Feb. 18.

The continued draw in stocks comes as product supplied of distillate fuel oil, an implied demand metric, for all of the US rose to a 15-month high during the same period, climbing 146,000 b/d to 4.45 million b/d, EIA data showed. It was last seen stronger at 4.53 million b/d during the week ended Nov. 8, 2019. Not only is the current level at a 15-month high, but it is also above the four-week average at 4.32 million b/d and the five-year average at 4.12 million b/d.

Alongside stock draws, production fell for the second straight week, dropping 63,000 b/d to 4.30 million b/d, the data showed.

Area refinery utilization increased for the third straight week, rising 0.1 percentage point to 83.1%. It was last seen stronger during the week ended March 20 at 87.3%.

Gulf Coast ULSD stocks draw, production continues to rise

On the Gulf Coast, ULSD inventories drew 720,000 barrels to 49.77 million barrels during the week ended Feb. 12, the EIA data showed.

Despite the stock draw, regional net production rose for the fourth consecutive week, gaining 21,000 b/d to 2.46 million b/d during the same period.

Area refinery utilization saw an increase for the fourth straight week, rising 1.2 percentage points to 86.5%, the data showed. The metric was last seen stronger during the week ended March 27 at 88.6%.

The Gulf Coast diesel market has been largely impacted by subfreezing temperatures hitting the region this week, causing multiple disruptions to the regional refinery complex as power losses continue in the state of Texas.

ULSD on the Gulf Coast has soared due to the current issues, with S&P Global Platts assessing the market at the NYMEX April ULSD futures contract minus 2 cents/gal on Feb. 17. The market was last seen stronger on Nov. 6 at prompt-month futures minus 1.25 cents/gal.

Atlantic Coast stocks draw for fifth consecutive week

On Atlantic Coast, diesel stocks saw a draw for the fifth straight week, falling 1.53 million barrels to 50.28 million barrels during the week ended Feb.12. Inventories were last seen weaker during the week ended May 15 at 49.59 million barrels, the data showed.

Regional net production fell for the second consecutive week, dropping 1,000 b/d to 186,000 b/d. The current level is below both the four-week average at 200,000 b/d and the five-year average at 198,800 b/d, the data showed.

Area refinery utilization decreased for the fourth straight week, falling 0.3 percentage point to 67.8%.

Along with ULSD on the Gulf Coast, offline diesel also surged earlier this week amid the winter storm. Platts assessed ULSD off the Colonial Pipeline at March futures plus 2.75 cents/gal on Feb. 16. The market was last seen stronger on Nov. 30 at prompt-month futures plus 3.25 cents/gal.

Platts assessed offline diesel at March futures plus 2.50 cents/gal on Feb. 17.

Buckeye Pipeline diesel also hit a multimonth high on Feb. 16, with Platts assessing the market at March futures plus 60 points/gal. It was last seen this strong on Oct. 30, when it was assessed at the same level.

The market appeared to still be rising on the morning of Feb. 18, with Buckeye Pipeline diesel heard to be bid at March futures plus 1 cent/gal.