By Thomas Catenacci
The U.S. stockpile of diesel fuel, which is vital for the transportation sector and economy at large, hit a nearly two-decade low as fuel prices hit a record high Wednesday.
The nationwide stockpile of distillate fuel oil — a category that includes diesel and fuel oil — declined to about 104 million barrels, the lowest level since May 2005, the Energy Information Administration (EIA) reported Wednesday. East Coast inventories declined to 21.3 million barrels of diesel fuel or about two weeks worth of supply, the lowest level since data was first recorded in 1990.
The U.S. stockpile of diesel fuel, which is vital for the transportation sector and economy at large, hit a nearly two-decade low as fuel prices hit a record high Wednesday.
“I wouldn’t be surprised to see diesel being rationed on the East Coast this summer,” John Catsimatidis, the CEO of United Refining Co., told Bloomberg on Wednesday. “Right now inventories are low and we may see a shortage in coming months.”
The average cost of diesel fuel in the U.S., meanwhile, surpassed $5.55 a gallon Wednesday, the highest level ever recorded, AAA data showed.
Diesel, which has been characterized as the “lifeblood of the global economy,” is vital for the construction, mining and agriculture sectors. The transportation industry alone consumed 122 million gallons of diesel in 2020.
“What we’ve seen this year has been the capabilities to turn oil into diesel and gasoline and jet fuel have diminished,” Jacques Rousseau, a managing director at Clearview Energy Partners, told The Daily Caller News Foundation in an interview.
Rousseau added that diesel fuel inventory levels and production have plummeted due to a decrease in refinery capacity nationwide. Several refineries, which process crude oil and turn it into diesel, have closed in recent years largely due to the COVID-19 pandemic-induced recession in 2020, he said.
Seven refineries, which processed a total of about 806,000 barrels of oil per day, have shut down over the last three years, leaving the U.S. with 124 operating refineries, down more than 10% since 2016, according to the EIA. Total U.S. operating refinery capacity fell 4.5% between 2020-2021 to 17.7 million barrels per day, its lowest level since 2013.
Meanwhile, bans on Russian fuels in the U.S. and Europe amid the Ukraine crisis has put even more pressure on the American energy industry which has sought to fill the gaps in the global supply chain. Although the U.S. is a net exporter of distillate fuel oil, it imported 77,000 barrels of the product from Russia in February.
“A lot of countries won’t accept Russian fuels anymore. So, that has caused a need for more diesel around the world and the U.S. is a major exporter of refined products. So U.S. diesel exports are up,” Rousseau told TheDCNF. “So, you have less capabilities, you got more exports and so what that’s doing is it’s drawing down the inventory levels in the U.S.”
Increased fuel prices and the decline of diesel inventory levels have already led to higher consumer costs, he added.
The two largest American transportation and freight companies — UPS and Union Pacific — have upped their individual fuel surcharges to account for the market instability. Union Pacific, which transports freight via rail, hiked its surcharge to a whopping 39% this month.
In addition, the U.S. food sector has also been impacted by the higher fuel prices. Higher diesel prices are “certainly going to translate into more expensive goods,” Patrick De Haan, an analyst at the research firm GasBuddy, told CNBC.
Tyson Foods, one of the largest U.S. food producers, noted that ” inflationary pressures across the supply chain” have led to higher costs in its earnings report Monday. Food prices increased 9.4% between May 2021 and April, the largest jump since 1981, according to the Department of Labor.
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Welcome back to the future, 1970’s. For those too young to know, during the Jimmy Carter years we had gasoline rationing. We had American hostages in Iran as 9 American helicopters broke down in a failed rescue mission due to the lack off military spare parts and democrat funding. My first mortgage interest rate was 14% for 30 years on a $32K home loan. Look what’s happening now! The progressive policies we are experiencing are actually regressive and have thrown us back in time. Those of you out there who voted for Joe (Obama’s 3rd term) Biden owe us and America an apology including our RINO governor and his trusted circle. Open borders for the invasion of drugs, criminals, terrorists. Depleted petroleum reserves for national emergencies, food shortages, baby formula shortages, gasoline approaching $5.00 a gallon, Opioid deaths over 100,000 and up 70% here in Vermont. The media lies over the Russian hoax to destroy an American President and nothing done about it. Health officials pushing a poisonous elixir and fear while coercion and shaming forced people to inject an experimental drug into their body or be fired by the state or a private business that could be fined for not complying. $82 billion dollars in high tech weaponry and vehicles abandoned in Afghanistan as well as American families and workers. And you voted for a woke military, more concerned with equity and inclusion than protecting America. I hope you are all proud of yourselves for being so ignorant and for bringing this destruction to America and our state. Thank you,Biden voters. Now suffer along with the rest of us who knew better but have been trapped in your nightmare.
Phony Joey Baloney did this, Phil Scott voted for him and the Vermont Republican Party is just fine with that.
Credit Biden with success, with fulfilling promises made before the election. The program to get Americans off petroleum fuels, to make them unaffordable and unavailable is succeeding. Reducing the strength of America’s economic status in the interests of international Equality or Equity or whatever the going phrase may be is yielding Biden’s promised results. The Progressives are succeeding despite rational resistance. They promised, they’re delivering.
Our “leaders” are not concerned, as long as there is plenty of fuel for their government and private jets. (And, no, the cost doesn’t matter.)
Biden is shipping our diesel to Ukraine to fight the proxy war, plus about $40 billion of our hard earned money, so there will be plenty of howitzers and bullets in Ukraine.
And plenty of baby food for those who come from all over, and illegally walk across the unguarded open border, and a shortage of baby food on US shelves for US children
This bunch of un-American rank amateurs have to be voted out EN MASSE in November 2022
This is what you get when you have an illegitimate administration and a senile old
man in charge, I guess taking an oath the support and defend the Constitution
means nothing ……………….. inept treasonous fools !!
I hope the country makes a real statement in November, but Vermont will not change
its being consumed by liberal nonsense, and we let it happen….. Pathetic.
Biden’s “fundamental transformation of America” is here. He said, when asked during the democrat debates, about “any future for fossil fuels”, “NO! We’re gonna phase them out!”..THIS is his “shock treatment” in a “path to a green future”..Elections have consequences & stolen ones more so. Thanks to the new doc. “2000 Mules” & trails left by cellphone pings & data the steal’s been exposed yet the “authorities” nonplussed. Be prepared for gas/diesel/fuel disruptions that make this “formula shortage” seem tame by comparison. And this is ALL by design, there may NOT be “conspiracies” but this is NOT coincidental. Maybe THIS will be the wake-up call that brings the apathetic to the polls to VOTE out the party responsible. Should we move to renewable energy? SURE, just NOT all at once as we’re ALL paying that price NOW.
It’s all manufactured. This is your new world order at work. You can’t build it back better till you tear it down first.
Elections have consequences and American’s are seeing that right now first hand Venezuela style.
Good luck.