Diesel supply lowest in US since 2008, could cripple economy: report

A recent report from Bloomberg emphasized how President Joe Biden’s focus on politics has only worsened economic and national security concerns as America’s diesel supply plummeted to its lowest since 2008. Down to “25 days of diesel supply,” economists raised alarms about “another wave of energy-led inflation.”

As the president has been playing the blame game, demonizing refiners, retailers and Republicans for the managed decline that he has helmed, analysts have observed measurable data points that paint a grim picture beyond the consequential midterms.

“The US has just 25 days of diesel supply, the lowest since 2008, according to the Energy Information Administration,” according to Bloomberg, which reported that despite a modest resupply en route with 1 million barrels of diesel diverted from Europe to New York, the low supply was being compounded.

“At the same time, the four-week rolling average of distillates supplied, a proxy for demand, rose to its highest seasonal level since 2007,” the news outlet reported.

Students for Trump founder Ryan Fournier drew attention to the looming crisis by posting, “The United States has just 25 days until our diesel gas supply is depleted. Prices are going to skyrocket across the board if this happens.”

The concern drew a great deal of criticism as naysayers focused on the timetable rather than how the low level would impact the prices in the market or defending the president.

Meanwhile, Bloomberg’s Valerie Tytel pointed out how the 2008 low was only a part of the depleted supply as, citing Javier Blas, diesel stockpiles were their lowest since 1951.

“Taking from @JavierBlas: ‘US has just 106 million barrels of diesel stockpiles. Last time inventories were that low in mid-October was in 1951. Inventories should be 30% higher this time of the year.’ Fed have another wave of energy-led inflation coming?” she asked.

Bloomberg went on to report, “The diesel crunch comes just weeks ahead of the midterm elections and has the potential to drive up prices for consumers who already view inflation and the economy as a top voting issue. Retail prices have been steadily climbing for more than two weeks. At $5.324 a gallon, they’re 50% higher than this time last year, according to AAA data.”

AAA also notes diesel fuel prices reached their highest recorded average of $5.816 per gallon on June 19 of this year.

This has led to wholesale diesel prices surpassing $200 per barrel, near record high only topped by a brief surge this past spring. That has led to a refiner margin of $86.5 per barrel, up about 450 percent from the recent two decade average of $15.7 per barrel.

Shortly after the warning bells on the low supply of diesel were rung, Biden had posted the much-maligned claim on Twitter that “right now, refiners and retailers are making record profits at the expense of the vast majority of Americans. It’s unacceptable,” with a chart showing the exact opposite.

As Biden played his blame game, Blas went on to write, “the diesel crisis leaves the Biden administration facing very difficult choices. If he leaves the market alone, prices are likely to rise further before they drop; if he intervenes, either setting up minimum inventory levels or restricting exports, price increases will likely be felt elsewhere into the world. Either route will have big implications for inflation at home and for energy security in Latin America and Europe.”


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