Distillate stocks in the Central Atlantic (Petroleum Administration for Defense District, PADD 1B), which encompasses the New York Harbor region, have risen nearly every week since April, reaching 36.9 million barrels as of October 30. This is 9.0 million barrels above the five-year average and 14.6 million barrels above the same time last year (Figure 1).
Over the past few years, the need for distillate inventories in PADD 1B has decreased because of the gradual decline in the demand for heating oil, the aggregation of high, low, and ultra-low sulfur specifications into just high and ultra-low distillate, and the ability to import distillate when necessary. This year, however, because of high gasoline crack spreads in domestic and international markets during the summer, gross inputs to U.S. refineries reached record highs and helped to bolster total U.S. distillate inventories. Growing distillate inventory levels in PADD 1B, particularly for this time of year, may also indicate a lack of demand for distillate regionally before the traditional heating season begins. Several regions in the United States, including the New York andPhiladelphia regions, have experienced declining manufacturing activity, possibly effecting distillate demand.