U.S. Distillate Inventories Fall 3.6 Million Barrels to Lowest Since May 2003
Key Facts
U.S. distillate inventories fell 3.6 million barrels in the week ended Oct. 30 to 99.3 million barrels, according to data from the U.S. Energy Information Administration. 24/7 Wall St. said the level was the lowest since May 2003 and that inventories were 13% below their five-year seasonal average. Distillates include diesel and heating oil, making the inventory decline directly relevant as the heating season begins. The agency's data showed distillate production at 5.154 million barrels per day during the same week. Demand, meanwhile, was 4.439 million barrels per day, up 0.232 million barrels per day from the previous week.
The weekly draw came amid a broader decline in inventories over the year; 24/7 Wall St. said about 33.7 million barrels, or 25% of supplies, had disappeared since January. It said the four-week average for distillate demand rose 8.7% from a year earlier. It added that the heating season had only just begun, while inventories were below 112.4 million barrels. The publication linked the supply shortfall to the war in Iran and the threat to oil tanker traffic through the Strait of Hormuz. These factors place the inventory decline in a context of higher consumption and risks to supply flows, without establishing that the market is facing a severe physical shortage.
Inventory pressures are more pronounced on the East Coast, where the Energy Information Administration said distillate inventories in September were 32% below their five-year seasonal average. The agency expected them to remain 20% to 30% below average over the coming winter. S&P Global said Atlantic Coast inventories in the week of Oct. 30 were 23.9% below the administration's five-year seasonal average. The deficit in New England was 42.9% from the usual level, according to the same source. The East Coast relies in part on imports; it imported 124,000 barrels per day of distillates in 2025, equivalent to about 10% of regional consumption, with imports typically peaking between December and February.
Higher heating oil costs were reflected in retail prices before the latest inventory reading; the U.S. residential average price was $6.138 per gallon on Nov. 2. That was $2.506 per gallon above its level a year earlier, according to Energy Information Administration data. Ultra-low-sulfur diesel futures at the New York Harbor, meanwhile, settled at $4.1309 per gallon on Nov. 10. They had settled at $4.4216 per gallon on Nov. 2, meaning the price fell between the two dates. The heating oil figure measures the retail price, while the New York reading covers futures contracts, so each reflects a different part of the market.
In an effort to support supplies on the Atlantic Coast, the U.S. Department of Energy announced on Nov. 2 that it had awarded 300,000 barrels of ultra-low-sulfur heating oil to four companies. Delivery was scheduled around Nov. 6. In its report issued on Oct. 6, the Energy Information Administration forecast that distillate inventories would remain below the 2021–2025 average throughout the projection period. It also forecast that retail prices would stay above $4 per gallon through 2027. The agency further expected East Coast inventories to remain 20% to 30% below their five-year average over the winter.
The next weekly Energy Information Administration report is scheduled for Nov. 12, after being delayed because of the federal government shutdown on Nov. 11. The report will cover data for the week ended Nov. 6, according to the official schedule. Ahead of its release, S&P Global forecast that national distillate inventories would fall 1.5 million barrels to about 97.8 million barrels that week. If the estimate is borne out, it would be the third consecutive weekly draw. These figures remain forecasts made before the new week's data are released, not an actual inventory reading for Nov. 6.