Americans ought to expect higher diesel prices as winter nears, given that the country’s inventory is at its lowest level since 2008.
According to an October 2022 report by the Energy Information Administration (EIA), the U.S. only had 25.4 days left of distillate supplies – which include diesel, jet fuel and heating oil. The report caused worry among analysts and experts, who feared a supply crunch that could cripple the economy.
Patrick De Haan, GasBuddy’s head of petroleum analysis told Newsweek that distillate supplies rose slightly to 26.0 days and inventories as of last week increased about 400,000 barrels, while the areas with the lowest inventories saw a well-needed rise in supplies as well.
Inventory is particularly low on the East Coast with the northeast experiencing the highest diesel prices, as per the Georgia-based major fuel supply and logistics company Mansfield Energy. Newsweek added that the southeast is reporting the worst supply outages.
While the slightly rising supply is certainly good news for the U.S. economy, diesel prices still remain high.
The news outlet indicated that the national average is $5.359 per gallon, lower than the Nov. 13 average at $5.362 per gallon, but higher than the previous week’s average of $5.338 per gallon and October’s average of $5.215 per gallon, according to the American Automobile Association. On June 19, diesel reached its highest-recorded average price at $5.816 per gallon.
“I’m hoping it might improve, but if it’s a cold winter, heating oil, which is very similar to diesel, could see higher consumption. We may make it through winter – but barely,” De Haan said. “Refiners are running hard and doing their best to produce more. If demand falls, we may get enough breathing room for supply to rise.”
Meanwhile, some experts think that the massive shortfall of diesel may be felt as early as Thanksgiving weekend.
“If the supply of [diesel] goes down even 10, 20 percent, that is going to result in significant ramifications, generally speaking, across the entire economy,” automobile industry expert Eric Peters told radio host Kate Dalley. “Unless the numbers are completely inaccurate, and they may well be, I do think it’s inevitable that we’re going to see some of these dislocations right around Thanksgiving.” (Related: America’s diesel fuel shortage could CRIPPLE the supply chain by Thanksgiving.)
Crippling diesel shortage will continue in 2023
According to the EIA report, the U.S. is facing a diesel crunch just as demand is surging ahead of winter with only 25 days of supply left. National Economic Council Director Brian Deese told Bloomberg TV that diesel inventories are “unacceptably low” and “all options are on the table” to bolster supply and reduce prices.
It is certainly a piece of bad news for America and neighboring countries as “the western world runs on diesel,” bestselling author Michael Snyder wrote in a blog entry.
“If we suddenly had no more diesel fuel, virtually all of our trains, trucks and ships would stop running. Needless to say, just about everything that stocks our store shelves comes to us via trains, trucks and ships,” he added. “Supplies have been declining for months, and at this point, diesel inventories have fallen so low that we only have a 25-day buffer remaining
Per a Bloomberg report, Mansfield Energy wrote to its clients that “conditions are rapidly devolving” and “carriers are having to visit multiple terminals to find supply, which delays deliveries and strains local trucking capacity.”
Some traders are even starting to divert cargoes with fuel that was originally bound for Europe. Tanker tracking data showed at least two Europe-bound tankers with some 90,000 tons of diesel and jet fuel getting diverted to the American East Coast.
Visit FuelSupply.news for more news related to the dwindling diesel supply in the United States.
Watch auto industry expert Eric Peters explain how the diesel shortage will affect the supply chain by Thanksgiving.
This video is from the InfoWars channel on Brighteon.com.
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