U.S. Winter Distillate Demand Expected to Increase

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• Demand is expected to increase 2% this winter over last. The forecast assumes normal winter weather, which would be 11% colder than we experienced last winter. However the Northeast would only be 7% colder than last winter. Demand growth is expected to be held in check in spite of the colder weather as a result of the economy slowing and higher prices dampening diesel and some other demand.

• This forecast is highly uncertain. It depends on weather, the economy, and the natural gas market. Both heating oil and diesel demand could be stronger than currently shown due to factors such as:
  • high natural gas prices causing more large customers to switch to distillate fuel;
  • a stronger economy and stronger diesel demand than expected, as well as
  • weather uncertainties. Should we have a fourth warmer-than-normal winter, the weather would moderate both natural gas switching into distillate as well as heating oil demand.