Diesel supplies in the U.S. are getting dangerously low, and shortages and price increases are likely to happen in the next six months until the economy and fuel consumption slow.
Only 106 million barrels of diesel and other distillate fuel oils were in stock as of the 21st of October.
This was the lowest amount for this time of year since 1982, when the U.S. Energy Information Administration (EIA) began collecting weekly data.
Distillate inventories were a huge 26 million barrels (-20% or -1.94 standard deviations) below the seasonal average for the last ten years.
Since the beginning of the year, when stocks were 15 million barrels (or 11% or 1.18 standard deviations) below the ten-year average, the deficit has been getting worse and worse.
By the end of July, stocks had dropped to 113 million barrels, the lowest level since 1996 and before that, 1954.
In terms of consumption, however, inventories at the end of July were only enough to cover 30 days of demand, the lowest seasonal level since monthly records began in 1945.
Since then, inventory has tightened. In October, stockpiles reached a historic low of less than 27 days of demand.
ULSD supplied to New York Harbor in December is $60 per barrel higher than for Brent. This is because the fuel shortage is getting worse.