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Diesel fuel -- The shortage grows.

A few days ago, IIT reported that the USA suffered from low inventories of petroleum distillates, especially diesel fuel. More recent days have brought further news of shortages of diesel fuel and predictions that the price of diesel fuel is likely to climb much higher soon.

Bloomberg reports that at least one fuel supply company, Mansfield Energy, is experiencing a diesel shortage, and, relatedly, higher diesel prices. The company depicts a dire situation:

East Coast fuel markets are facing diesel supply constraints due to market economics and tight inventories.

Poor pipeline shipping economics and historically low diesel inventories are combining to cause shortages in various markets throughout the Southeast. These have been occurring sporadically, with areas like Tennessee seeing particularly acute challenges.

In many areas, actual fuel prices are currently 30-80 cents higher than the posted market average, because supply is tight. Usually the "low rack" posters can sell many loads of fuel before running out of supply; now, they only have one or two loads. That means fuel suppliers have to pull from higher cost options, at a time when low-high spreads are much wider than normal.

Mansfield is . . . moving the Southeast [ region of the USA ] to Code Red, requesting 72-hour notice for deliveries when possible to ensure fuel and freight can be secured at economical levels.

 The map above depicts those areas in which Mansfield has declared a "code red" due to fuel shortages.

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Thursday, 05 December 2024