U.S. diesel inventories fall to record seasonal lows, raising supply concerns as the winter heating season approaches

According to Jinse Finance APP, data released by the U.S. Energy Information Administration (EIA) on Wednesday showed that for the week ending August 21, inventories of distillate fuel oil, including diesel, decreased by 2.2 million barrels to 103.4 million barrels, 14% lower than the five-year average for the same period, reaching the lowest level for this period on record since the early 1980s. As the Northern Hemisphere enters the winter heating season and autumn harvest season, typically starting around October, global diesel demand will rise seasonally. With current inventories at dangerously low levels, this could further push up fuel prices and intensify inflationary pressures driven by energy costs.

Due to ongoing disruptions to refined fuel exports through the Strait of Hormuz, U.S. retail diesel prices have surpassed $5.60 per gallon, approaching their highest level since the outbreak of the U.S.-Iran conflict.

EIA data released on the same day showed that for the week ending August 21, U.S. commercial crude oil inventories (excluding strategic petroleum reserves) increased by 95,000 barrels to 428.9 million barrels, 1% above the five-year average for the same period. Although the increase was below market expectations, it marked the fourth consecutive week of growth, primarily due to simultaneous declines in imports and exports and flat production. Meanwhile, gasoline inventories fell by 2.5 million barrels to 206.8 million barrels, 6% lower than the five-year average for the same period.

Crude oil futures fell for a third consecutive trading day on Wednesday, as the market anticipates that economic pressure rather than military action from the United States against Iran may lead to the reopening of the Strait of Hormuz. This shift in sentiment weighed on oil prices. Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted in a report: "The market has shifted from previously pricing in a high probability of prolonged disruption and escalation of conflict, to now factoring in the partial reopening of the strait, negotiation of shipping arrangements, and a reduced risk of military confrontation."

Both major crude oil price benchmarks fell to their lowest intraday levels since August 10, but losses narrowed after the EIA inventory report showed U.S. crude oil stockpiles rose less than expected. October WTI crude oil futures on the New York Mercantile Exchange edged down 0.1% to settle at $82.23 per barrel, while October Brent crude oil futures fell 0.8% to close at $87.84 per barrel.

Regarding U.S. natural gas futures, hot weather is expected to persist through late August and early September, keeping power sector demand strong. The nearby September contract rose 2.6% to close at $2.842 per million British thermal units, marking the highest close in a month.