U.S. diesel supply reaches lowest point since 2008
BRIDGEPORT, W.Va (WDTV) - There’s been recent estimates suggesting the U.S. only has about 25 days left in its diesel supply. That means its at its lowest point since 2008.
Diesel does more than just move trucks -- it moves our economy too.
Heavy duty freight trucks are an integral part of the supply chain, transporting everyday needs like food and medical supplies to businesses.
Recent reports that the U.S. has only enough supply left for 25 days have caused alarm, but it’s important to clarify 25 days left in supply does not mean the U.S. is going to run out of diesel in 25 days. That would only be the case if production and import of diesel completely ceased -- something experts say is highly unlikely.
But one West Virginia diesel supplier, Jill Oliver of Oliver Fuels & Oil says some people are already preparing for the worst.
“People a lot lately have been calling a lot from all over the state asking about fuel tanks for storage, they’ve been wanting to stockpile,” said Oliver. “We’ve been having a lot of panic buying.”
Dr. John Saldanha is a professor of economics at WVU and an expert on global supply chains.
He says panic buying may actually make the situation worse and deplete local reserves faster than they can be replaced. This in turn will drive up the prices.
Saldanha says if these freight companies will be feeling a greater strain, it could cause the cost of the goods they deliver going up as a result.
“I don’t see a significant concern except with the price of diesel going up -- what is going to really hurt people is if you’re getting goods to the stores and to your homes by truck the prices of those goods are going to go up,” said Saldanha.
Saldanha says the supply on average sits around 30 to 40 days. He says the market will soon begin to correct itself with crude oil producers diverting more of their supply to diesel production.
“When there is an increase in demand you see that producers want to take advantage of that high price and produce more of that commodity -- so that’s likely what is going to happen as prices go up,” said Saldanha.
Saldanha says due to global supply factors like the war in Ukraine it difficult to estimate how long this correction will take. He says in the meantime, unfortunately the prices will likely remain high.
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