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Petroleum

Oil Markets Surge on Favorable Demand Data and Winter Storms

Strategic Insights

— 1 min read

Favorable new data on refined products demand and stocks, combined with continuing winter storms, helped ignite sharp gains in oil markets. No. 2 heating oil futures for March delivery rose 1.64 cents to 48.86 cents a gallon, while spot prompt No. 2 at New York Harbor rose 2.5 cents a gallon. The surge in oil markets was driven by a 23.3% increase in demand for distillate fuel oils in the four weeks ending February 18, 1994, compared to the same period in 1993.

Key Takeaways:

  • Demand for distillate fuel oils (No. 2, low-sulfur diesel) rose 23.3% to 4.124 million b/d in the four weeks ended February 18, 1994, compared to levels of a year earlier.
  • No. 2 heating oil futures for March delivery rose 1.64 cents to 48.86 cents a gallon, while spot prompt No. 2 at New York Harbor rose 2.5 cents a gallon.
  • Wholesale prices of distillates edged up, with No. 2 rising 0.11 cents to 50.57 cents a gallon, and low-sulfur diesel gaining 0.19 cents to 52.18 cents a gallon.
  • Unleaded regular gasoline futures for March delivery to New York Harbor rose 1.35 cents to 44.67 cents a gallon, while spot unleaded regular increased 0.8 cents a gallon at New York Harbor.
  • Wholesale unleaded regular rose 0.15 cents to 48.81 cents a gallon.
  • April West Texas Intermediate futures rose 36 cents to $14.77/bbl, despite a 3 million bbl rise in crude oil stocks last week.

Sources:

  • Energy Information Administration (EIA) reported demand for distillate fuel oils rose 23.3% to 4.124 million b/d.
  • EIA reported a 3 million bbl rise in crude oil stocks last week.
  • The American Petroleum Institute (API) reported a 3.2 million bbl drawdown of distillate stocks last week.
  • The Oil Daily and Computer Petroleum Corp. nationwide rack price survey reported wholesale prices of distillates edged up.
  • The American Gas Association reported a 68 Bcf, or 10.7%, drawdown of underground gas storage in the eastern consuming areas of the country last week, and a 23 Bcf, or 6.9%, drawdown in the producing regions.

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