Five years ago, Vermont enacted a law requiring steep reductions in GHG emissions and, in 2023, it directed regulators to develop a program to steer households and businesses away from heating oil and propane. But now everything’s in limbo — a development with important implications for other states.
The March appropriations bill passed by Congress and signed by President Biden to fund the federal government mandated the emptying of the federal gasoline reserve in fiscal year 2024, which concludes September 30, followed by its eventual closure. That means about 1 MMbbl — 42 MM gallons — of gasoline will find its way to the market in the next few months, or in as little as a few weeks. The Department of Energy (DOE) is planning to distribute those barrels by the end of June to help keep a lid on gasoline prices ahead of the July 4 holiday and into the heart of the summer driving season. In today’s RBN blog, we look at the decision to close the reserve and the potential impact of those barrels hitting the market.
Just as homeowners in parts of the Northeast are thinking about turning on the heat again, the market for heating oil, diesel and other middle distillates in PADD 1 is unusually tight. Inventories are hovering near their five-year lows; prices are up sharply; and the near-term prospects for rebuilding stocks are modest at best. For one thing, the import-dependent region can’t rely on them as much as it used to; for another, at least a couple of in-region and nearby Canadian refineries the Northeast counts on are offline for major turnarounds. In today’s RBN blog, we discuss the latest developments in PADD 1’s distillates market.
The U.S. market for distillates has been crazy the past few months — especially in PADD 1 — and given all that’s going on, it’s likely to stay that way for months to come. Inventories of ultra-low-sulfur diesel, heating oil and other distillates are at their lowest levels for this time of year since before the EIA started tracking them 40 years ago and diesel prices are in the stratosphere, all despite diesel crack spreads being in record-high territory — a strong incentive for refineries to churn out more distillate. In the encore edition of today’s RBN blog, we discuss the many factors affecting distillate supply, demand, inventories and prices and take a look ahead at where the market may be headed next.
The U.S. market for distillates has been crazy the past few months — especially in PADD 1 — and given all that’s going on, it’s likely to stay that way for months to come. Inventories of ultra-low-sulfur diesel, heating oil and other distillates are at their lowest levels for this time of year since before the EIA started tracking them 40 years ago and diesel prices are in the stratosphere, all despite diesel crack spreads being in record-high territory — a strong incentive for refineries to churn out more distillate. In today’s RBN blog, we discuss the many factors affecting distillate supply, demand, inventories and prices and take a look ahead at where the market may be headed next.
U.S. inventories of distillate — especially ultra-low-sulfur diesel (ULSD) and heating oil — are at their lowest pre-winter level in three years after falling during the summer months for the first time since inventory records started being measured in 1982. Rising diesel exports are one culprit; another is the shutdown of a number of Gulf Coast refineries during and immediately after Hurricane Harvey. The good news is that distillate prices have been increasing, as have the margins for refining crude oil into distillate — both encouraging refineries to ramp up their diesel/heating oil production. Today, we look at recent developments in the distillate market and what they may mean for diesel and heating oil prices this winter.
A combination of pipelines and ships delivers some 4 MMb/d of transportation and heating fuels to the U.S. East Coast, most of it from Gulf Coast refineries. But there’s always room for improvement in refined products delivery infrastructure, whether it’s pipeline or port capacity expansions, new pipeline spurs, or new storage capability. The aim of these projects is almost always the same: to make distribution more efficient and to hold down the per-barrel cost of delivery. Today, we conclude our series with a look at possible infrastructure improvements and a note about the challenges these projects face.
Most of the gasoline, diesel, heating oil and jet fuel consumed in the U.S. East Coast region is piped in via long-distance pipelines from Gulf Coast refineries, but substantial amounts are moved in by ship—either from the Gulf Coast by Jones Act vessels or from overseas. These shipped-in volumes then need to make their way from port to consumer. Today we continue our examination of how transportation fuels and heating oil are delivered to East Coast users with a look at the ports and connecting pipelines that help move these critically important fuels.
The East Coast consumes more than 200 million gallons of gasoline, diesel, heating oil and jet fuel a day, but produces only one-fifth of that total, most of it at New Jersey and Pennsylvania refineries. To keep the region’s cars, trucks, trains and airplanes moving (and many of its homes and businesses heated) huge volumes of fuels need to be delivered from elsewhere, mostly via two pipelines from the Gulf Coast and the rest by ship—some from Gulf and other U.S. ports and some from overseas. Today, we continue our examination of the infrastructure that moves gasoline, diesel, heating oil and jet fuel to the nation’s largest fuel-consuming region with a look at four major pipelines.
Every day, refineries along the U.S. Gulf Coast produce far more gasoline, diesel and jet fuel than the region could possibly use, and demand for these fuels along the East Coast for transportation and heating is far higher than local refinery production. To help bring the two regions into balance, a complicated network of pipelines, ports, Jones Act vessels and storage facilities has been developed over the past 70 years—and continues to be updated and expanded. Today, we begin a new series on how millions of barrels of these fuels are moved between and within the nation’s largest refining region and the region where more is used than any other part of the U.S.
