The warmest winter for more than 30 years reduced fuel oil demand drastically in the United States in 2015/16 and left the country heavily oversupplied with heating oil.
The good news for refiners and heating oil suppliers, however, is that winter 2016/17 will almost certainly be colder, boosting demand in the months ahead.
Heating demand across the continental United States was 16 percent below average between December and February, according to the National Oceanic and Atmospheric Administration (tmsnrt.rs/26T3AhP).
Demand for heating fell more than 21 percent year on year compared with the winter of 2014/15, which was significantly colder than normal (tmsnrt.rs/26T4N8P).
Heating accounts for only a small proportion of distillate fuel oil consumption in the United States. But the mild winter, coupled with sluggish freight movements, cut consumption by almost 37 million barrels between December and February compared with the previous winter.
Distillate consumption was down by about 400,000 barrels per day (bpd), more than 9 percent, from the previous year, U.S. Energy Information Administration data shows