Consumers are not expected to reduce consumption much in the short term. As we enter the peak gasoline season, refiners will be pushed to just meet demand. With low stocks and refineries operating at high levels, any supply disruptions could trigger another price runup. In closing, I want to direct your attention to the upcoming heating season. Although consumers are now focusing on gasoline, EIA is concerned about winter heating fuel supplies.
Distillate stocks remain well below normal.
Strong gasoline and diesel demand this summer will effectively limit heating oil stock building as refinery production is used to meet consumption. Partly for the same reasons, natural gas has yet to show signs of building adequate inventories ahead of next winter. Not only does this mean industrial and utility consumption of more distillate this winter, it suggests utilities may use more distillate this summer to meet peak cooling needs, if natural gas prices remain high through the summer months. This could further reduce distillate stock building, resulting in very low distillate inventories before winter begins. This concludes my testimony.