By Dan Molinsky
Two of the largest truck stop chains in the United States, Love’s and Pilot, said on Thursday they were closely monitoring low diesel fuel supplies in the Northeast amid growing concerns about nationwide shortages. industry, but said they had no intention of restricting purchases.
“Most markets in the eastern United States remain extremely low on diesel inventory levels,” said Brad Jenkins, senior vice president of supply and distribution for Tennessee-based Pilot Co. , noting that parts of the Midwest are also experiencing tight supplies amid the refinery. problems. “All other markets are currently adequately supplied. We are also undertaking contingency planning to continue to have a stable source of diesel fuel.”
Pilot has more than 750 Pilot Flying J Travel Centers in 44 states and five Canadian provinces. Truck stops have 6,200 diesel lanes, 5,300 showers and 790 restaurants.
On Wednesday evening, Oklahoma-based Love’s Travel Stops, with 550 locations in 41 states, released a similar statement.
“Love’s is monitoring the fluid situation on the East Coast, we have experienced minimal outages during low traffic hours,” Love’s said. “The company does not intend to restrict diesel purchases.”
Stocks of diesel fuel, which in the United States is used primarily by truckers, have been falling since the start of the pandemic, but those declines have accelerated since the start of this year. Analysts attribute the declines to reduced refining capacity, strong demand for trucking fuel during the pandemic and a recent surge in diesel exports.
The U.S. government’s Energy Information Administration said Wednesday that total distillate inventories, which are mostly diesel fuel but also fuel oil, fell last week to a 17-year low of 104 million barrels last week, or 23% below normal.
On the East Coast, the situation is worse. The EIA said inventories of distillate fuel oil in northeastern states fell from 1.1 million barrels last week to 21 million barrels, the lowest recorded in data dating back to 1990.
Falling diesel inventories could cause fuel prices to continue to eclipse record highs. AAA said the average price of a gallon of diesel fuel in the United States hit a new high on Thursday, at $5.56 from $3.14 a year ago. Gasoline prices also hit an all-time high on Thursday at $4.42 a gallon from $3.01 a year ago.
Another reason for declining US diesel fuel inventories is that fuel exports have risen sharply in recent months despite low inventories. For the week ending April 8, U.S. distillate exports hit a four-year high of 1.7 million barrels per day, according to the EIA.
Some analysts have speculated that the growing exports are being sent to Europe following Russia’s invasion of Ukraine.
But Matt Smith, chief oil analyst at tanker tracking firm Kpler, said that doesn’t appear to be the case.
“The drop in distillate inventories is due to lower refining during the pandemic (due to lower gasoline demand) while distillate demand has held up much better (given trucking of merchandise, Amazon, online shopping, etc.),” Smith said. “Middle distillate exports are also playing a small role, returning to pre-pandemic levels – but that’s not a pull to Europe, it’s to LatAm, their main destination.”
Refining cycles in the United States now stand at 15.7 million barrels per day, compared to an average of 16.4 million over the 2015-2019 period, Smith said. “Refiners just haven’t produced as much and rebounded to pre-pandemic levels.”
Write to Dan Molinski at [email protected]