EIA: Harvest season will boost US demand for distillate fuel oil in autumn

The U.S. Energy Information Administration stated on Friday that the consumption of distillate fuel oil is expected to rise in autumn, as diesel-powered equipment is used for harvesting and transporting crops.

EIA stated that the EIA has found that the harvest peaks in mid-October, and continues through November. This coincides with the beginning of winter heating season, which also drives demand for distillate fuel oil.

The weak demand for diesel in the United States has led to a sharp decline in refiners' margins. This is because industrial consumption has decreased due to a slowdown in economic activity, and renewable diesel has gained popularity.

Market participants reported that agricultural co-operatives were active buyers of ultra low sulfur diesel on the Chicago spot market during the past few weeks, as they prepared for harvest season.

The U.S. has seen its consumption of distillate oil increase by 4% on average between September and November, due primarily to agricultural harvest trends.

The EIA predicts that distillate demand will generally be in line with the average of the last five years this year, based on early indications.

(source: Reuters)