by WorldTribune Staff / 247 Real News October 24, 2022
According to the Energy Information Administration (EIA), the U.S. has in its stockpile less than a month’s supply of diesel fuel, the lowest since 2008. Demand, meanwhile, rose to its highest seasonal level since 2007.
Retail prices for diesel have been steadily climbing for several weeks. At $5.324 a gallon, they’re 50% higher than this time last year, according to AAA data.
“The historic diesel crunch comes just weeks ahead of the midterm elections and will almost certainly drive up prices for consumers who already view inflation and the economy as a top voting issue,” Zero Hedge noted in an Oct. 20 analysis. “But while the White House claims to be so very concerned about the coming diesel crisis, it is doing absolutely nothing besides draining the SPR (Strategic Petroleum Reserve) which has zero impact on diesel production.”
The American diesel market “has been in crisis mode for most of 2022,” the analysis noted, but Team Biden has done nothing to address it.
As Bloomberg’s Javier Blas writes, “such low levels are alarming because diesel is the workhorse of the global economy. It powers trucks and vans, excavators, freight trains and ships. A shortage would mean higher costs for everything from trucking to farming to construction.”
“Meanwhile, 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. In New England, where more people burn fuel for heating than anywhere else in the country, stockpiles are less than a third of typical levels for this time of year,” the Zero Hedge analysis noted.
Zero Hedge continued: “In a testament to just how clueless the Biden admin is, last spring wholesale diesel prices surged to all-time high as inventories plunged in April and May, pushing retail prices to a record high. At the time, this website (and many others) warned that we have to take urgent steps now to avoid a crisis… and nobody moved a finger; jaw bones on the other hand never stopped. Well, fast forward to now when a new crisis is in the making. America typically uses the low-demand seasons of spring and summer to rebuild its stocks of distillate fuels ahead of the winter. But it failed to do so this year – something even Europe avoided by stockpiling nat gas knowing it faces a freezing winter otherwise – and stocks are now nearly as low as they were in April, at the end of the last heating season.”