Winter demand will bolster prices for fuel oil in the U.S

Demand for fuel oil will move up in the US this winter for the third straight year, largely on the strength of lower prices and increased economic activity. The weather, predicted to be only a little colder than last winter, will make a minor contribution to the demand increase. Natural gas consumption also will be up again this year. However, substantially higher gas prices will slow the rate of gain. Increased demand from the industrial sector will lead the way, with higher demand also expected from residential and commercial customers. Those increases will be somewhat offset by slightly lower demand among electric utilities, where demand will slip due to higher prices and fuel switching capability. The paper discusses demand and stocks for distillate fuels, residual fuel oil, and natural gas; refinery capacity and utilization; and prices