US Diesel Crisis Hits Eastern Seaboard

Diesel fuel inventories in the East Coast are at their lowest level ever heading into the winter, prompting some areas in the Northeast to ration fuel.

According to one estimate, the U.S. has only 25 days of diesel fuel — the lowest since 2008.

One supplier, calling “conditions rapidly devolving,” is requiring customers to give 72 hours’ notice to secure fuel and freight, Bloomberg reports.

“At times, carriers are having to visit multiple terminals to find supply, which delays deliveries and strains local trucking capacity,” said the supplier, Mansfield Energy, in a note to clients.

In areas of the country where diesel fuel is tightest, prices are 30-80 cents higher than the market average, according to Mansfield.

The shortage, which is also spreading to Europe, is due to underinvestment in refining capacity and refinery closures, according to Goldman Sachs.

Energy suppliers are counting on the Colonial pipeline, the main supply of diesel for the Southeast, to replenish supplies. However, the first shipment will not reach Atlanta until Nov. 3, and New York a week after that.

Fortifying that delivery, however, overseas cargoes are on their way, but will not reach the U.S. until the end of October.

National Economic Council Director Brian Deese told Bloomberg “all options are on the table” to replenish supply and reduce prices.

 


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