Experts say 25 day supply on-hand does not mean diesel shortage
“It does not imply that we are going to run out of diesel in 25 days.”
TYLER, Texas (KLTV) - According to the U.S. Energy Information Administration, the nation has a 25.8 days’ worth of diesel supply at this time. This number is historically low for our nation, as experts say we are usually at a 35 to 40 day on-hand supply.
But that number may not mean what you think.
The head of Petroleum Analysis and Gas Buddy, Patrick De Haan says that number is what oil analysts use to measure the balance of supply and demand.
“It simply means that that is how many days that we have on hand if refineries were to completely stop nationwide which is not the case. That’s how many days that supply would last.” says De Haan.
He explains that supply is low because refineries are having to keep up with the demand, as this time is usually the seasonal maintenance of the year. Also, the demand for heating oil is high. Diesel and heating oil are the same molecules, and heating oil is used to heat homes before the winter.
Another factor is the Russian war on Ukraine which is pulling more diesel towards Europe, leaving supply to be tight.
In turn, De Haan predicts higher diesel prices to continue as we head into the winter season.
He says, “As refineries finish up maintenance, that number should start to improve slightly. But I would expect that amidst a pretty strong economy and going into winter, that diesel prices probably will remain fairly elevated through the winter and potentially into early parts of next year.”
New England and Central Atlantic states will be the most affected by the low diesel supply because they lack enough refining capacity.
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