Distillate Supplies Probably Fell Last Week, Survey Shows

U.S. inventories of distillate fuels probably decreased for a third week as cold weather boosted demand for heating oil, a Bloomberg survey showed. Crude stockpiles rose.

Distillate supplies, including diesel and heating oil, declined by 2.55 million barrels, or 2.1 percent, to 118.2 million last week, based on the median of 10 analyst estimates before a report from the Energy Information Administration tomorrow. Nine respondents projected a drop and one saw a gain.

The U.S. will get another blast of arctic air this week, the National Weather Service said. About 25 percent of households in the Northeast use heating oil to warm their homes, according to the EIA, the Energy Department’s statistical arm. Crude inventories increased for a second week as imports grew, the survey showed.

“Distillate stocks should show a significant draw due largely to last week’s cold Northeast temperatures,” Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois-based consulting company, said in a note to clients. “Crude supplies are expected to show a sizable increase as imports likely recovered further.”

January is on track to be the coldest month of the century in the lower 48 states, according to Commodity Weather Group LLC. Demand for distillate rose 1.5 percent in the week ended Jan. 17 to 3.78 million barrels a day, the most since Dec. 20, the EIA said last week.

Crude Stockpiles

“There is higher regional demand for heating oil in the Northeast,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC.

Crude inventories rose 2.25 million barrels last week, or 0.6 percent, to 353.5 million, the survey showed. All 10 respondents saw an increase. Imports gained 9.5 percent in the week ended Jan. 17 to 7.54 million barrels a day, according to the EIA.

Supplies of gasoline climbed 1.6 million barrels, or 0.7 percent, to 236.9 million, which would be the highest level since February 2011. Eight analysts predicted a gain and two forecast a drop. The refinery utilization rate increased 0.9 percentage point to 87.4 percent of capacity in the survey.

Ultra low sulfur diesel, a proxy for heating oil, advanced 2.94 cents, or 1 percent, to settle at $3.1218 a gallon on the New York Mercantile Exchange.

West Texas Intermediate crude for March delivery gained $1.69, or 1.8 percent, to $97.41 a barrel in New York. Gasoline futures for February delivery climbed 0.61 cent to $2.6278 a gallon.

The EIA is scheduled to release its weekly petroleum report at 10:30 a.m. tomorrow in Washington.

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