Myra P. Saefong, MarketWatch

SAN FRANCISCO
EnergiesNet.com 11 09 2022

The Energy Information Administration raised its 2022 and 2023 price forecasts for heating oil and diesel on Tuesday, as U.S. supplies of the fuels known as distillates marked their lowest end-of-October level in more than 70 years.

In its monthly Short-Term Energy Outlook report, the government agency said residential heating-oil prices, including taxes, are expected to average $4.79 a gallon this year — up 4.8% from the October forecast. For 2023, it lifted its heating-oil price forecast by 9.9% to $4.63 a gallon.

Retail diesel prices, including taxes, are expected to average $5.09 a gallon this year, up 2.5% from the previous forecast, with prices for 2023 at $4.65, up 8.4% from the EIA’s October forecast.

U.S. inventories of distillate fuels, which are primarily consumed as diesel and heating oil, will lead to high prices through early 2023, the EIA said. domestic distillate fuel supplies finished the month of October at their lowest levels in any October since 1951, it said.

“Inventories are just one part of the supply equation for diesel and other distillates,” said EIA Administrator Joe DeCarolis, in a statement. “The distillate fuels in storage aren’t the only source of diesel we have to keep trucks and trains moving, but lower-than-average storage levels will contribute to higher costs for diesel and for heating fuels through the winter.”

The government agency also noted that it sees additional uncertainty in the global marketplace for distillates and other fuels, given that the European Union plans to ban imports of petroleum products from Russia in early 2023.

The front-month December heating-oil futures contract tacked on 1.5 cents, or 0.4%, to $3.7963 a gallon in Tuesday trading

The average U.S. price for retail diesel stood at $5.334 a gallon on Tuesday, according to data from GasBuddy. It’s up from $5.289 on Friday.

Read:Diesel shortage keeps fuel prices high at the pump

The EIA, meanwhile, raised its 2022 forecast for U.S. benchmark West Texas Intermediate crude prices by 0.1% to $95.88 a barrel and by 0.9% to $89.33 for 2023. It left its forecast for global benchmark Brent crude this year virtually unchanged at $102.13, but lifted its 2023 forecast by 0.8% to $95.33.

In Tuesday dealings, the front-month December WTI oil contract lost $1.29, or 1.4%, to $90.50 a barrel on Nymex, while January Brent crude traded at $96.93 a barrel on ICE Futures Europe, down 99 cents, or 1%.

marketwatch.com 11 08 2022