The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
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dateline Calendar of Events JUNE "The good news is that this is helping to ease a market that was relatively tight for several years," she added. "The technology that unlocked the bonanza in places like North Dakota can and will be applied elsewhere, potentially leading to a broad reassessment of reserves." Expanding North American oil supply is great news for U.S. heating oil customers, because a growing oil supply is the best protection against oil price increases. Market fundamentals suggest a more comfortable global oil supply/demand balance in the near future, the report states. It forecasts North American supply to grow by 3.9 million barrels per day (mb/d) from 2012 to 2018. "World liquid oil production capacity is expected to grow by 8.4 mb/d — significantly faster than demand - which is projected to expand by 6.9 mb/d," the report states. EIA: Heating oil futures contract now uses ultralow sulfur diesel fuel The U.S. Energy Information Administration's "Today in Energy" brief reports NYMEX's heating oil futures contract now has low sulfur content requirements, which coincides with cleaner-burning heating oil required by several Northeast states. Historically, standard futures contracts for heating oil allowed for delivery of product with sulfur content up to 2000 parts per million (0.2%). Beginning with the May 1, 2013, contract, the New York Mercantile Exchange switched its specification for the heating oil futures contract to the ultra-low sulfur diesel specification. Many states in the Northeast require the switch over the next several years to lower sulfur heating oil. The new contract specifications were announced in April 2012 and took effect with futures contracts for delivery starting in May 2013 that are traded on Nymex and the CME Globex platform. The new specifications reflect the changing regulatory climate for heating oil in northeastern states, which as a region have the highest consumption of heating oil in the United States. The new contract will have a physical effect as well, by changing the nature of the products stored by industry in New York Harbor (NYH) tankage. Because NYH is the delivery point of the Nymex futures contract and because most terminals are expected to store only one commingled product (ULSD), rather than segregating two distillate products (home heating oil and ULSD), physical delivery of higher sulfur home heating oil would become difficult in the near future. New York was the first state to limit sulfur content in distillate used for heating purposes in July 2012, requiring that heating oil contain less than 15 ppm. Other northeastern states plan to follow suit, with Connecticut, Maine, Massachusetts, New Jersey, and Vermont all scheduled to require ULSD for heating purposes by 2018. This change is likely to result in a slightly higher heating oil futures price when compared to historical prices. Since ULSD contains lower amounts of sulfur and requires more refining steps to make, it typically has a premium to distillate fuels with higher levels of sulfur. In February and March, the difference between the April heating oil contract and the May heating oil contract averaged nearly $0.08 per gallon. ICF International's Propane Market Outlook The ICF's 2013 Propane Market Outlook is out, which provides a view of the challenges and opportunities for domestic propane markets through 2020, offers an update on the current state of the propane industry with a review of sales data, and looks at key market trends. The key points: Based on its detailed resource based assessment of natural gas liquids production, ICF International is projecting North American propane production from natural gas liquids to increase by more than 35 percent, from 13.4 billion gallons in 2012 to 18.1 billion gallons in 2020. However, the growth in propane supply from natu- Cleaner Heat 2013 June 18 & 19 Delta Beausjour Moncton, New Brunswick Contact: veronica.yu@coha.ca The Rhode Island OESP Clambake and Tabletop Displays June 25 Rehobeth, MA JULY Pennsylvania Petroleum Association's Summer Conference July 7-9 Developing Your Business' Service Edge Grand Hotel Ocean City, Maryland ral gas liquids production will be partially offset by declines in refinery production and imports. The growth in propane supply will allow aggressive growth in propane exports, which are expected to peak at more than 4.5 billion gallons per year in 2015, as well as growth in petrochemical feedstock demand after 2015. Consumer propane demand is expected to remain stable, with continuing declines in traditional markets, including space heating largely offset by growth in engine fuel demand. The growth in propane supply will change the economics of propane production in the U.S. While ICF expects propane prices to increase relative to international propane prices in the near term as the NGL industry adds new export capacity and addresses processing and transportation constraints in certain markets, prices should stabilize at levels well below historical prices relative to crude oil. ICF International partners with government and commercial clients to deliver professional services and technology solutions in the energy, environment, and infrastructure; health, social programs, and consumer/financial; and public safety and defense markets. More information can be found at its website: www.icfi.com FUEL OIL NEWS (ISSN 0016-2396), Canada Publication Mail Agreement #1588621, is published monthly by Specialty Information Media. 1030 W. Higgins Road, Suite 230, Park Ridge, Il 60068. Circulated free of charge to qualified individuals in the oil heating industry in the United States. Additional and/or personal copies are available on a paid subscription basis only. 1-year subscription rates: $28.00 USA. $40.00 Canada and Mexico via service postage. $90.00 other foreign countries via air-mail postage. Single copies: $8.00 U.S. via first-class postage. $12.00 other Canada/Mexico/Foreign via airmail postage. Payable in US currency. Periodicals postage paid at Park Ridge, IL and additional mailing offices. Copyright 2013 by Bev-Al Communications, Inc. Reproduction of any portion or portions of this publication is specifically prohibited without written consent. 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