U.S. distillate fuel oil inventories fell to a 23-year low last week, the Energy Information Administration said on Thursday, as the Iran war continues to choke global fuel supplies and raise demand for U.S. crude and petroleum products.
The country’s distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels in the week ended May 22 to 100.8 million barrels, the lowest since May 2003. Analysts had expected a 1.02 million-barrel drop.
“We’re going to continue to see U.S. inventories declining the longer the Strait remains closed,” said Patrick De Haan, head of petroleum analysis at GasBuddy, highlighting the urgency of the peace negotiations between the U.S. and Iran.
Demand for U.S. products has remained high since the closure of the Strait of Hormuz, which blocks nearly a fifth of global oil flows. Exports of petroleum products – which include motor gasoline, distillate fuel oil and jet fuel – stood at 8.1 million barrels in the week, the EIA said, up 590,000 barrels from the previous week.
U.S. refineries have ramped up production to meet rising demand, with the utilization rate at 94.5%, up by 2.9 percentage points from a week ago.
(Reporting by Nicole Jao and Siddharth Cavale in New York; Editing by Matthew Lewis)