News source Bloomberg reported on Oct. 19 that U.S. diesel supplies had hit historic lows, citing government figures that had been released last week.
The story, which can be accessed at https://www.bloomberg.com/news/articles/2022-10-19/a-25-day-diesel-supply-and-surging-demand-are-a-worry-for-biden , noted that demand for diesel fuel continues to surge and shortage for heating and trucking diesel is “a key worry for the Biden administration heading into winter — and ahead of the November election.” The story went on to say, “National Economic Council Director Brian Deese told Bloomberg TV Wednesday that that diesel inventories are ‘unacceptably low’ and ‘all options are on the table’ to build supplies and reduce retail prices.”
Writer Chunzi Xu said that while this country’s diesel supplies remain at “the lowest seasonal level ever” and the overall lowest since 2008, “Some relief is on the way. At least two vessels carrying around 1 million barrels of diesel are due to arrive in New York after being diverted from their original destinations in Europe. Delta Air Line’s Trainer refinery in Pennsylvania is also returning from seasonal maintenance, which will increase regional diesel production.”
Bloomberg did not report the source of that diesel nor when it is expected to arrive in New York.”
The story said that as the shortage worsens, “the four-week rolling average of distillates supplied, a proxy for demand, rose to its highest seasonal level since 2007. While weekly demand dipped slightly, it’s still at highest point in two years amid higher trucking, farming and heating use.”
In addition, it said, “Retail prices have been steadily climbing for more than two weeks. At $5.324 a gallon, they’re 50 percent higher than this time last year, according to AAA data.”
A story published on Oct. 19 by Hawaii News Now at https://www.hawaiinewsnow.com/2022/10/19/biden-administration-calls-oil-companies-produce-more-oil-asks-lower-gas-prices-prior-midterms/ noted differing numbers from AAA, reporting, “According to AAA, the average price of gas in the US is $3.85, more than 50 cents higher than a year ago.”
The HNN story added that the cause of the price hike was the Russian invasion of Ukraine and said, “As a result, President Joe Biden announced Wednesday the US will sell 15 million barrels of crude oil from its Strategic Petroleum Reserve.
“Energy Secretary Jennifer Granholm says this completes the sale of 180 million barrels per day over a six-month period which President Biden promised he would do. The White House says the Administration will buy back the crude oil for the SPR when prices are at or below $67-$72 per barrel.”
Bloomberg also reported that as “refiners entered maintenance season and as Russia’s war in Ukraine tightened global supplies and limited imports.”
Bloomberg also said that “market backwardation — where prompt deliveries are priced at a premium over future deliveries — has made building inventory extremely costly, feeding into a vicious cycle of tight supplies and price spikes.”