By Dan Molinsky
One of the largest truck stops in the United States, Love’s, said on Wednesday it was closely monitoring its diesel fuel supplies in the Northeast amid growing concerns about industry-wide shortages. , but said he had no plans to limit purchases.
“Love’s is monitoring the fluid situation on the East Coast, we experienced minimal outages during low traffic hours,” Oklahoma-based Love’s Travel Stops said in an emailed statement. “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.
Earlier on Wednesday, the US government’s Energy Information Administration said total distillate inventories, which are mostly diesel fuel but also fuel oil, fell last week to a 17-year low of 104 million barrels, or 23% less than normal.
On the East Coast, the situation is even worse. The EIA said inventories of distillate fuel oil in the so-called PADD District 1 which covers the northeastern states fell from 1.1 million barrels last week to just 21 million barrels, the lowest ever recorded in data dating back to 1990.
Love’s truck stops, with some 550 locations in 41 states, also appeared to confirm reports posted on social media on Wednesday that Love’s and other truck stops such as Pilot were notifying their fleet operators of diesel fuel shortages on the East Coast may occur in the future. week in some stores.
“Love’s Fleet’s sales team has proactively alerted the company’s fleet customer base to maintain its consistent and direct approach to changing market fluctuations,” he said. in response to social media posts. “Love’s is committed to keeping its customers well informed of market developments ahead of trends to help mitigate the impact on their business.”
Representatives for the Pilot truck stops were not immediately available for comment.
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 Wednesday, at $5.55 from $3.13 a year ago. Gasoline prices also hit an all-time high on Wednesday, at $4.40 a gallon from $2.99 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 draw for Europe, it’s for 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]