Energy Prospectus

US East Coast Diesel Stockpiles Hit Record Low As Fuel Crisis Nears
BY TYLER DURDEN
WEDNESDAY, MAY 04, 2022 - 11:31 AM

We noted Tuesday evening, D (for Diesel)-Day quickly approaches, though it might already be here as U.S. East Coast distillate inventories plunge to a record low, according to new government data. Weekly petroleum data from Energy Information Administration's (EIA) Crude Oil Inventories show East Coast distillate inventories are at their lowest ever, dropping to just 22.4 million barrels.

One of the reasons for the drop is East Coast refinery capacity has plunged over the last decade, "leaving the region vulnerable to squeezes," according to Bloomberg's Javier Blas. "In the past 15 years, the number of refineries on the U.S. East coast has halved to just seven. The closures have reduced the region's oil processing capacity to just 818,000 barrels per day, down from 1.64 million barrels per day in 2009." -Blas

Total U.S. refinery utilization capacity has plunged from 96% in February to 86% at the end of April. Also, the U.S. has halted energy imports from Russia.

There's also the issue Gulf Coast refiners' are prioritizing exports to Europe rather than increasing domestic supply, sending the price of diesel to a record high.

America Runs on Diesel

Diesel is used in trucks, tractors, freight trains, and power generation. Soaring prices will only exacerbate inflationary pressures.

Blas said: "The diesel shortfall is nearing crisis levels."

Reality is starting to sink in about the worst inflation in four decades. Truckers have told the Dirty Jobs guy Mike Rowe that it now costs $1,000 to fill up their fuel tanks.

Rowe said truckers aren't buying the Biden administration's narrative that Russia is responsible for soaring fuel prices.

With the U.S.' busy travel season less than a month away and diesel inventories on the East Coast at record lows with refinery capacity in the region struggling, this could only suggest a fuel crisis could be nearing. < I expect rationing of diesel to begin in June.

See article below for the charts to see how serious this problem is.
https://www.zerohedge.com/commodities/u ... isis-nears

thanks Dan
we see diesel prices impacting everything in our lives...just walk the aisles at the neighborhood grocery store

just a general comment

50 BPS hike today, the markets knew it was coming...

will the same old FOMC toolbox tricks slow down inflation this time? guess that's all they have left, the White House offers nothing else except distractions over Roe v Wade and January 6th
they have nothing else to talk about

while the Biden Team is still employing the power of the Federal government to punish domestic energy production.... add in the effects of the Russian invasion of Ukraine, sanctions, etc.... hitting the global economy in areas of energy and food production. Just watch wheat prices...there's an ETF for wheat futures prices, Teucrium Wheat fund , symbol (WEAT) I've been long wheat since Russia invaded Ukraine. Check the charts for WEAT, starting another leg higher, indicators are turning up. Diesel & fertilizer shortages are a huge factor, along with Russia-Ukraine war. Perfect storm for wheat prices. Not so good for the poor countries in the world dependent on Ukraine for wheat.

if you had the misfortune to have lived through the Carter years 1976-'80 , you know exactly what it was like, and this time it feels like Carter 2.0 stagflation coming (on steroids).

good luck to all

I took 42,000 bbls out of the market ,

I sold it today, too volatile , (even for me)

Team Biden , worst President , bar none, by a factor of 10.

First 10 minutes he cancels a mostly completed 10 b pipeline setting the agenda for fossil fuel hate