Slide 6 of 15
Notes:
This slide shows the strong influence crude oil prices have on retail distillate prices. The price for distillate fuel oil tracks the crude price increases seen in 1996 and the subsequent fall in 1997 and 1998. Distillate prices have also followed crude oil prices up since the beginning of 1999.
Actual data show heating oil prices on the East Coast in June at $1.20 per gallon, up 39 cents over last June. However, if heating oil prices are following diesel, they may be up another 5 cents in August. That would put heating oil prices about 40 cents over last August prices. Crude oil prices are only up about 25 cents in August over year ago levels. The extra 15 cents represents improved refiner margins due in part to the very low distillate inventory level.
Diesel fuel prices behaved similarly, though with less of a spike last winter. The average East Coast diesel price in August was $1.47 per gallon, 33 cents higher than a year ago. As in heating oil, we are seeing the impact of of low stocks on the distillate market take hold.
