Monday, October 15, 2012
The graph above of distillate stocks from the EIA's This Week in Petroleum has been occasioning some interested comment. It shows that stocks of distillates (ie diesel and heating oil taken together) are low in the US northeast relative to recent history for this time of year. I was curious to know if this was explained by dropping consumption of heating oil in the US generally, but there isn't a sharp sign of a drop off in the last year or two:
This is an interesting situation in light of the record lows in Arctic sea ice this fall. Specifically the US northeast is going into the beginning of winter with unusually small stocks of heating oil and yet all that uncovered Arctic ocean is going to give rise to more than the historical amount of atmospheric moisture in northern climates. That pretty much has to show up in December as a lot of snow somewhere.
Presumably, we are hoping that "somewhere" won't be the northeastern US. Otherwise heating oil prices could spike dramatically.