Increased demand and low inventories drive U.S. distillate prices higher

Rising crude oil prices, low refinery production, and increased consumption of distillate fuel have contributed to the highest nominal (not adjusted for inflation) distillate prices since 2014. Distillate is a category of fuel that includes diesel fuel and heating oil. The front-month futures price for ultra-low sulfur diesel (ULSD) for delivery in New York Harbor surpassed $3.00 per gallon (gal) on February 28 and closed at $4.44/gal on March 8. Rising crude oil prices account for much of the increase in ULSD prices, but other market fundamentals specific to distillate are also contributing to the higher prices.