U.S. diesel inventories have fallen to a historical low for this time of year, raising supply concerns as the winter heating season approaches.

The U.S. Energy Information Administration (EIA) reported on Wednesday that as of the week ending August 21, the inventory of distillate fuel oils, including diesel, decreased by 2.2 million barrels to 103.4 million barrels, which is 14% lower than the five-year average for the same period and marks the lowest level recorded for this time of year since the early 1980s. With the onset of the winter heating season in the Northern Hemisphere and the autumn harvest season typically starting around October, global diesel demand is expected to seasonally rise, while current inventories are at dangerously low levels, potentially driving up fuel prices further and exacerbating energy-driven inflationary pressures. Due to ongoing disruptions to refined fuel exports from the Strait of Hormuz, U.S. retail diesel prices have surpassed $5.60 per gallon, approaching the highest levels since the outbreak of the U.S.-Iran war. The EIA report on the same day indicated that as of the week ending August 21, U.S. commercial crude oil inventories (excluding the Strategic Petroleum Reserve) increased by 95,000 barrels to 428.9 million barrels, which is 1% higher than the five-year average for the same period. This marks the fourth consecutive week of increase, primarily due to a decline in both imports and exports while production remained flat. During the same period, gasoline inventories decreased by 2.5 million barrels to 206.8 million barrels, which is 6% lower than the five-year average. Crude oil futures fell for the third consecutive trading day on Wednesday, as market expectations of U.S. economic pressure on Iran rather than military action potentially reopening the Strait of Hormuz dampened sentiment and suppressed oil prices. Ole Hansen, the head of commodity strategy at Saxo Bank, noted in a report: "The market has shifted from pricing in a high probability of prolonged disruptions and escalations to pricing in a scenario where the strait partially reopens, shipping arrangements are negotiated, and military confrontation risks decrease." The two major oil price benchmarks dipped to their lowest levels since August 10 during the day, but the drop narrowed after the EIA inventory report showed that the increase in U.S. crude oil inventories was less than expected. The near-month WTI crude oil futures for October delivery fell 0.1% to close at $82.23 per barrel; near-month Brent crude oil futures for October delivery dropped 0.8% to close at $87.84 per barrel. On the U.S. natural gas futures front, as high temperatures are expected to persist until late August and early September, demand in the power sector remains strong, with the near-month September contract rising by 2.6% to close at $2.842 per million British thermal units, marking the highest closing level in a month.