Wednesday, November 17, 2004

A few facts for you to ponder while you roast your chestnuts by that radiator powered by heating oil this evening.

US distillate -- the stuff from which home heating oil is made -- production is up to 3.85 million bpd on its four-week average ending November 5. US distillate imports are at 0.30 million bpd, down a bit from late October averages but up from September and early October levels. The four-week average of domestic production plus imports for the week ending November 5 thus totaled 4.15 million bdp.

US distillate demand for the week of 11/5 (four-week average) was 4.22 million bdp. A year ago at this time is was just 3.80 million bdp -- more than 11% higher y-o-y.

Thus it's no surprise that, despite impressively ramped up production, distillate stocks continue to fall.



It's getting particularly worrisome in the Northeast, the region most dependent on heating oil. Stocks in the Central Atlantic states rose slightly the week of 11/5 for the first time in months, yet they continue to fall in New England. And this is during a late fall which has been quite average to, if anything, slightly above average in temperature. What happens when that first blast of arctic air comes hurtling down out of Canada?

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