Intense regulations have made it complicated to open any new refinery, which means it might not be financially viable in our current economic times to proceed with such a significant development. Renault could face prosecution in France over faulty engines as a group of customers plans to lodge a criminal complaint against the carmaker next week, the group's lawyer said on Friday. On October 31, the aforementioned fact-checking website Verify ran an article with the subhead The U.S. wont run out of diesel fuel before Thanksgiving, as Fox News host Tucker Carlson and others have claimed on social media. In this piece, the author spoke to several energy analysts who debunked the notion, and who also pushed back upon the idea of a looming diesel catastrophe. 07/15/22 4:40 PM EDT, There is no truth to the right-wing myth of a catastrophic diesel shortage, Newsmax guest defends Chick-Fil-A: They sell fried chicken. October 21st, 2022, 9:21 AM PDT. But that seems to have calmed down. Several factors have been contributing to the diesel shortage. So critics say that an export ban could backfire and actually drive up pump prices in areas of the country. Growth in distillate consumption has been closely correlated with changes in industrial production estimated by the U.S. Federal Reserve and manufacturing activity in surveys by the Institute for Supply Management. LONDON,ENGLAND - MAY 11: Fuel pumps with "Sorry Out of Use" signs on petrol station forecourt on May [+] 11,2022 in Kingston Upon Thames, London, England. Saudi Arabias making $1 billion from #oil exports every day. Speaking to Newsweek on November 2, oil industry analyst Tom Kloza stated that refineries now have a very high incentive to continue producing diesel. Remember, high gas prices hurt refining, However, in the past 15 years, that number has halved to a mere seven in operation. This is where we used to burn crude oil to create diesel. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. What's causing a diesel shortage in the U.S.? Many closed during the 2008 recession, and several shut down more recently. But its a relatively small amount (e.g., ~5% in a refinery I once worked in). A diesel fuel tank at Jacobi Oil Service Inc. in Floyds Knobs, Indiana, U.S., on Wednesday, Oct. 20, 2021. All these facts together tell us that, yes, there is a diesel shortage happening. three main reasons. NPR transcripts are created on a rush deadline by an NPR contractor. A week after Carlsons initial segment, De Haan told Politico that those diesel Armageddon stories are just not coming to fruition. In the same piece, Lipow stated that no one is suggesting were going to shut down all the refineries at once.. This can drive up costs, and make it more economical for that Gulf Coast refiner to export to Europe or South America. Newsmax host Chris Salcedo says there will be a diesel fuel shortage this winter, solely blames Democrats for U.S. energy problems: "Fuel suppliers are warning of a worsening diesel fuel supply . Diesel then the U.K. And now, of course, over the next couple While the recipe and process is old and proven, two gentlemen won a Nobel prize in 2005 for showing how to greatly improve the process. And why is that? here right now. For this time of the year, just ahead of winter, inventories should be 30 percent higher. High diesel prices lead to an increase in logistics and production costs for businesses. The US has only a 25 day supply of diesel fuel. Refiners in Texas and Louisiana can export diesel out of the Gulf Coast to buyers in Latin America and Europe for an immediate profit -- and they have been doing just that. Thats ultimately a political question. XU: Yeah. natural gas prices globally. And that will shift more of the burden of global supply onto U.S. refiners. As a result of the unwillingness of oil companies and refiners to take a hit on their bottom line, many regions are experiencing shortages and subsequent price hikes of more than 60% in just a few short months. At the same time, really hurt. Substantial diesel volumes come to the Northeast from the Gulf region via the Colonial Pipeline. The State Wants to Fix That, As Texas Housing Costs Creep Up, So Do Zoning Reform Efforts, Bitcoin Miners Are Churning Out More Computing Power Than Ever, Winklevoss Twins Gemini Exchange to Seek Crypto License in UAE, The US has only a 25 day supply of diesel fuel. Does the administration have any options here? In fact, distillate inventories havent been this low in October since the EIA began reporting this data in 1982. Individuals should consider whether they can afford the risks associated to trading. His interests include all aspects of energy technology, history, diplomacy, derivative markets, risk management, policy and transitions. For. This would provide a much-needed cushion of supply in the most vulnerable regions and forestall shortages. "Normally, East Coast markets would have about 50 million barrels of supply in storage throughout the marketand sometimes much more," wrote Mansfield Energy in a news release published on October 27. Factors impacting the shortage include. Diesel Fuel Release Date: May 22, 2023 Next Release Date: May 30, 2023. As mentioned above, distillate demand spikes at this time of year. Low distillate inventories have sent diesel prices soaring. 06/01/23 8:17 PM EDT, Video & Audio Some might try to ride out the wave and absorb the costs, even though fuel prices might see some drivers at risk of breaking even or experiencing losses. Along with the . Second factor is the very, very high More stories like this are available on bloomberg.com, The basics for making smart money decisions, What Backwardation Has to Do With US Diesel Squeeze. Oil expert Andy Lipow was quoted, saying, We will not run out of diesel in 25 days unless we simply stopped producing or importing and drew down inventory. There also are refineries still shut down due to the pandemic and at least 2 scheduled to shut down. Backwardation and contango are names for curve structures that map traders guesses about what a given contract will be worth in the future. My assumption is correct there? We can make pristine clean diesel from coal. Market Realist is a registered trademark. Thats far worse than the situation in 2008. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. The country is down to 25 days of diesel supply with stockpiles at their lowest level for this time of year in records going back to 1993. U.S. companies have been exporting more than a million barrels a day of distillates for about a decade. It's a pocketbook issue. The . Last week, the Energy Information Administration (EIA) reported that distillate inventories were at their. Deese told Bloomberg TV that all options are on the table to build supplies and reduce retail prices. Whether youre tired of the fuel prices or believe now is the right time to divest your assets, discuss your options with TruckVin. They noted that while its technically true that the U.S. Energy Information Administration (EIA) 25-day supply of diesel fuel number is correct, its being misinterpreted. That's problematic because Port Everglades is the entry point for 12.5 million gallons a day of energy products, from jet fuel to gasoline to diesel, for 12 Florida counties. Stocks of diesel and other distillate fuel oils were just 106 million barrels on Oct. 21, the lowest for the time of year since the U.S. Energy Information Administration (EIA) started collecting weekly data in 1982. dire situation at home. And supplies are going to tighten further over the next few months because Europe is going to pivot away from Russian fuel more so than they have done with their embargo coming in the next few months. It was almost like we were - people were talking about it all the time. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Kloza said it is the middle of the barrel diesel that. High prices do not help anyone. This is a BETA experience. But the false narrative that Carlson and the right-wing media set in motion is still being circulated on social media by high profile Republicans. Currently, gas prices range from a high of $5.83 per gallon in California and $3.23 a gallon in Georgia. Refineries on the East Coast had to scale back due to staffing issues, and it can take several months and up to a year to have them operating at pre-COVID levels. I don't know how much more inclusive we can get., Fox News' Jesse Watters suggests Joe and Hunter Biden, the Mexican president and drug cartels are conspiring to steal the 2024 election, Sean Hannity promises he wont challenge or fact-check Donald Trump during Iowa town hall, Fox host Mark Levin opposes prison sentence for woman who threatened to hang Nancy Pelosi, The debt ceiling deal collapses the rights Biden dementia smear, Right-wing media used OPEC oil cuts to blame Biden for domestic gas price volatility, Ahead of midterm elections, Fox News once again attacks the Biden administration for rising gas prices, Fox fuels outrage over noncontroversial oil reserve releases. Europe is already grappling with a fuel crisis due to situation in Ukraine. Republicans don't support this decision, with Sen. Steve Daines writing in a letter to Biden, "Manipulating energy reserves to bring gas prices down from historic highs as the midterm elections approach is not an accomplishment, it is a national security risk.". Over the past two weeks since 15 May, when the CMA updated its road fuel market study to indicate that supermarket margins had risen, the average price of a litre of diesel at supermarkets fell by . There's a big difference between the price of gasoline and diesel. [1/2] Storage tanks for crude oil, gasoline, diesel, and other refined petroleum products are seen at the Kinder Morgan Terminal, viewed from the Phillips 66 Company's Los Angeles Refinery in Carson, California, U.S., March 11, 2022. In the days since the original October 28 monologue, there has been a wave of right-wing TV news reporting on the idea that either the U.S. will run out of diesel before Thanksgiving, or that there is a looming diesel shortage that is the sole fault of the Biden administration. }. MARTIN: Wow. Opinions expressed by Forbes Contributors are their own. All rights reserved. 06/01/23 7:17 PM EDT, Video & Audio But the relatively small volume available in these reserves mean the relief won't last for very long. The urgency here is pretty incredible, About 59% of Atlanta's stations were reported empty. So this is not going to get better. In addition, the US gasoline market is also backwardated, about three times as much as it was this time last year. So what will it mean if things continue like this? This refers to market conditions where the spot price of diesel or another commodity is higher than its price in the future. But I don't expect it to be anywhere near to the Colonial Pipeline outage in 2021. is now coming back to haunt us. While data from the Energy Information Administration shows that the U.S. has about a 25-day supply of diesel, the country will not actually run out of fuel soon, experts confirmed to The Associated Press. Are they responding to this, and if so, how? Refineries do have a small amount of flexibility in shifting gasoline production to diesel production. For East Coast fleets, thennow is the critical time to make sure your supplier has a plan for the winter to keep your equipment running. That is ultimately a business decision for each company, although its understandable that consumers would be upset by such decisions. 7. A shortage of diesel fuel is spreading across the United States, with one company launching an emergency delivery protocol, requesting a 72-hour advance notice from clients to be able to make the . He's on "Bloomberg Markets: European Close." However, in 2008 distillate levels were low coming out of spring. facing diesel supply constraints due to market economics and tight inventories. And and I think would be very damaging So that's where we are today going. If the fuel scarcity gets worse and has the potential to drive inflation, in a worst-case scenario for consumers, daily life becomes increasingly expensive while in the middle of a recession that's supposed to suppress demand and cool inflation. Its hard to argue that it wouldnt, but it would exacerbate the crisis elsewhere. Florida gas prices rose 12 cents per gallon to start the month. Wednesday 31 May 2023, 1:36pm. Not to mention that parts of the U.S. on the East Coast and West Coast do rely on international imports that will become more expensive. And particularly on the East Coast, where supply is tightest and most reliant on foreign imports, the risk of actually running out of fuel is higher than ever because stockpiles in the region have been at record lows since April for diesel and a decade low for gasoline. The factors fueling the refining shortage won't surprise anyone: With demand for gasoline and jet fuel practically vanishing during the height of the pandemic, companies closed some of their. Is this only happening in the US diesel market? - Recession . Can The Oil And Gas Sectors Deliver On Their Decarbonization Promises? What is the administration considering? https://t.co/AnawgIxL06 pic.twitter.com/mYwfj04r3C. All quotes delayed a minimum of 15 minutes. One declared bankruptcy and subsequently burnt down, while another in Newfoundland closed its doors as recently as 2020. "But stay tuned," he cautioned. 06/01/23 12:59 PM EDT, Article And that's where we where we have right Global diesel inventories were running low before the Russia-Ukraine war, and the supply-side turmoil caused by the conflict only added to the issues. According to an update by the IEA on November 9, heating-oil prices have . And winter hasn't even begun. MARTIN: And also, some parts of the country, is it accurate to say that the prices still haven't eased in some parts of the country?
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