Northeast distillate inventories decreased by 19% in the past 3 weeks and are currently 50% below the 5-year average, according to the EIA. “Demand for heating oil has outpaced supply during January’s cold snaps, resulting in a drawdown of stocks… In addition to increased demand from consumers that regularly use oil heat, press reports indicate that some commercial, industrial, and electricity generating customers that typically burn natural gas delivered under less-expensive non-firm contracts are turning to oil because their natural gas suppliers have exercised their interruption rights in order to serve customers with firm contracts.” [EIA]

Europe appears set to face high energy costs for at least the next 2 decades, damaging competitiveness and job creation, according IEA Chief Economist Fatih Birol. “’Europe didn’t realise the seriousness of this competitive issue,’ he said, warning the situation raises concern for the almost 30m people working in heavy industries such as iron, steel and petrochemicals across the continent.” [Financial Times]

Transporting crude oil via railroad remains a hot topic, with North American production booming and pipeline capacity constrained. New pipelines – Keystone XL, Trans Mountain and Northern Gateway in particular – could take some of the pressure off rail transport, but if these infrastructure projects do not materialize, rail could be here to stay and some planned oil sands expansion projects could be postponed or cancelled. Some great charts in here too! [Ernst & Young]