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.




(c) Copyright 2025 DTN, LLC. All rights reserved.