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Thursday, December 1, 2022

US Diesel Fuel Shortage Expected for Winter 2022

US diesel fuel shortage expected for Winter 2022 by more and more experts in the field as the days get colder. This year, one of the large diesel fuel distributors saw a reduction in inventory starting right before the season with the highest demand. Though diesel supplies have slightly increased, prices for the fuel remain high.

On October 14, the EIA reported that the country had an average of just over 25 days of diesel fuel left in reserve. This has led analysts and experts to worry about a US diesel fuel shortage which could cause gas and diesel prices to skyrocket and America’s economy to suffer significantly.

US Diesel Fuel Shortage Expected for Winter 2022

Although U.S. diesel supplies have slightly increased in early November, experts say it is due solely to a small increase in imports from Saudi Arabia. This is another factor that can affect the price of crude oil, including government regulations and supply disruptions.

Fear among investors in the country still hasn’t completely gone away, but there has been some progress when it comes to replenishing dwindling inventories. The US diesel fuel shortage expected for winter 2022 is likely to affect the prices of manufagtured goods that rely on transportation by truck.

US Diesel Fuel Shortage Expected for Winter 2022

US Diesel Fuel Shortage Expected for Winter 2022

How much fuel do we have in the U.S.?

Patrick De Haan, who is head of petroleum analysis for GasBuddy, told Newsweek that “we [saw] diesel supplies rise slightly to 26.0 days,” over the past week. Inventories last week increased by approximately 400,000 barrels while the areas where stocks were lowest saw a well-needed pick up in supplies.” While that is good news for those hoping to curtail the US diesel fuel shortage expected for Winter 2022, it may not be enough.

It is clear that the potential US diesel fuel shortage expected for Winter 2022 is affecting the entire country and has had some of the most significant impacts on the East Coast. Georgia-based company Mansfield Energy reports that North Easterners are experiencing the highest prices while the South Easterners are reporting some of the worst supply outages.

Why Is There a Diesel Shortage 2022?

Due to a combination of factors including high demand and low inventory caused by decreased capacity of U.S. refineries and bans on imports, there is currently an oil shortage in the US. If this winter proves especially cold or challenging in other ways, the average consumer could be burdened with skyrocketing fuel prices.

It’s good news for the U.S. economy when inventories are on the rise, as it generally means the average cost per gallon of regular fuel at the pump goes down. However, diesel prices remain high. On Nov. 3rd, the national average was $5.359 per gallon, a significant increase from October’s average of $5.215 per gallon, according to AAA.

Why is There a Shortage of Diesel Oil? US Diesel Fuel Shortage Expected for Winter 2022

The scarcity of diesel fuel is causing prices to rise. In most areas, the average price for a gallon of diesel fuel is around $5.36, but in some places the prices are even higher. On June 19, 2022, the average price for diesel was $5.816 per gallon. Gaspricesdaily.com’s report cites an example from Oklahoma City where fuel was recently selling for $6 per gallon.

Although we’re not sure how this winter will go, the price of heating oil is on the rise. Fuel prices are slowly climbing up and are likely to contribute to the rising costs of living in winter. With the rate of inflation increasing at historic levels not only in the US but in almost every corner of the world, an increase in the cost of transportation of goods will likely be passed on to consumers as well.

US Diesel Fuel Shortage Expected for Winter 2022 4

US Diesel Fuel Shortage Expected for Winter 2022

 

Diesel is a type of fuel with a high octane number that powers the world’s transportation systems. Trucks carry all types of consumer goods across the country and as the price of diesel rises, so will the prices of those goods being transported by trucks.

The US diesel shortage isn’t doomsday scenario, according to some gas experts. An update by the IEA on the 9th of November, showed some demand for heating oil has appeared more mild than expected thanks in large part to a recent pattern of moderate temperatures.

“Residential heating-oil prices have increased in recent weeks,” writes the EIA, reaching a record-high of $5.91 per gallon (gal) the week of November 7. Though it’s not clear why, oil prices have, however, still been steadily rising.

The price of heating-oil has been the most expensive in the Central Atlantic region as a result of low supply and high demand. The prices have also been going up in the Northeast region of the US as well as across Canada.

US Diesel Fuel Shortage Expected for Winter 2022 3

US Diesel Fuel Shortage Expected for Winter 2022

That’s the area that uses most heating oil across the entire continent. In fact, the U.S. Census Bureau estimates that 18% of households in the North East and 33% in New England use heating oil to heat their primary spaces. De Haan pointed out the difficulties of these uncertain future scenarios, but emphasized that there is still hope.

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