One More Crisis Under Biden Right Before the Election
So many things have gotten worse under Joe Biden.
Yet there’s still one more crisis out there, as we count down the days to the midterms. Diesel supply is incredibly low — we have just 25 days of supply.
Diesel demand is surging in the US while supplies remain at the lowest seasonal level ever, according to government data released Wednesday.
The shortage of the fuel used for heating and trucking is a key worry for the Biden administration heading into winter — and ahead of the November election. National Economic Council Director Brian Deese told Bloomberg TV Wednesday that that diesel inventories are “unacceptably low” and “all options are on the table” to build supplies and reduce retail prices.
The US has just 25 days of diesel supply, the lowest since 2008, according to the Energy Information Administration. At the same time, the four-week rolling average of distillates supplied, a proxy for demand, rose to its highest seasonal level since 2007. While weekly demand dipped slightly, it’s still at highest point in two years amid higher trucking, farming and heating use.
Now when the supply is constrained, it drives the prices up, as if the prices weren’t already high enough for so many things. But this then affects things like trucking, shipping, and farming, with the ripple effect of rising costs.
The retail national average diesel price is currently $5.340. It was $3.579 a year ago, that’s $1.761 more. Bloomberg also notes that there’s “market backwardation” going on as well which means that deliveries now are priced higher than future deliveries, making “building inventory extremely costly, feeding into a vicious cycle of tight supplies and price spikes.”
Meanwhile, we’re going into winter as well as the holiday season when there’s a greater demand for shipping.
It’s also not just diesel, as Epsilon Theory’s Ben Hunt explained, noting jet fuel and heating oil were also in short supply, while not being helped by the Fed’s effort to temper inflation with interest rate hikes.
Bloomberg does note that there is some help on the horizon with 1 million barrels expected to be shipped into New York soon and Delta Air Line’s trainer refinery coming back online to increase production. But that likely wouldn’t relieve the continuing problem
The way to approach this would be to ax all the stupid restrictions on the oil energy that put us in this position to begin with, to support the industry so that you’re not facing critical shortage that drives prices up, not just continuing to rip off the Strategic Petroleum Reserve to help yourself in the elections. But that would require committing to supporting the industry rather than attacking it.
You would think that Joe Biden — as a former 18-wheeler truck driver — would understand that. Not so much.
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