EIA Eyes Lower Distillate Stocks Amid Improved Demand
Karim Bastati
DTN Analyst
Commercial U.S. crude oil inventories declined for a second week in a row,
according to Energy Information Administration data. The agency on Wednesday
reported a 2 million bbl draw to commercial crude oil stocks in the week ending
May 2, bringing inventories to 438.4 million bbls, down 4.6% year-on-year. This
came despite a 672,000-bpd week-on-week jump in net imports.
Nationwide distillate fuel oil inventories shrank by 1.1 million bbls and
were at their lowest since November 2023 at 106.7 million bbls. The for the
season typical decline in middle distillate stocks was more precipitous than in
years past, leading to them trailing year-ago inventory levels by 8.3% and the
five-year average by 13%.
This phenomenon was also reflected in EIA's latest short-term energy outlook
released Tuesday. The agency revised lower end-of-quarter stock estimates for
distillate fuel oil by 5.4% from last month's forecast, leading to 2.6% lower
end-of-year stocks. This implies 12% lower inventories than in 2024. At the
same time, consumption estimates were revised slightly higher to now above
year-ago levels.
Domestic demand for diesel and heating oil has in fact improved from last
year, according to EIA data. Distillate fuel oil supplied to the market -- a
proxy for fuel demand -- averaged 3.71 million bpd over the past four weeks, up
3.1% year-on-year.
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