EIA estimates the U.S. currently has about 25 days of distillate inventory – about 5 days fewer than this time last year.
A key difference between then and now is that the 2008 dip arrived heading into summer – after peak demand in spring – rather than on winter's doorstep when there is increased demand for distillates like diesel fuel, heating oil and jet fuel. Distillate levels haven't been this low in the month of October since 1982.
Among the pains fleets feel at the fuel island, a widespread outage isn't likely to be one of them.
"Diesel supply is tight and diesel inventories are low," said Tiffany Wlazlowski Neuman, vice president of public affairs NATSO, a trade association representing America's travel centers and truckstops. "This is a structural problem, but the market is adjusting to get product where it needs to be as efficiently as possible. Absent a disrupting event, the current period of vulnerable stability can continue."
Tina Arundel, senior director of communications for Travel Centers of America, said her company doesn't have any significant concern across its 280 locations in 44 states, and is "not certain why anyone would be out of product."
"There is no shortage but the supply and logistics system is strained," said Tom Kloza, global head of energy analysis at Oil Price Information Service (OPIS), who cautioned the use of the term "shortage" in describing diesel fuel availability, adding "it's incredibly expensive," and that OPIS has confirmed pricing variances of 50 cents to $1 per gallon from customer to customer.
"I've never seen prices so tiered. The 'privileged' tier comes where a large marketer can buy at a spot index (say Platts or Argus) plus an agreed upon mark-up," he said. "We'll use the example of someone buying diesel at Greensboro [North Carolina] for Gulf Coast spot plus 7 cents per gallon. That would add up to a price (Monday) evening of about $3.70 per gallon. Most of the posted prices in Greensboro are far higher. Branded supply on Monday afternoon was available at $4 per gallon, while unbranded diesel fetched about $4.60 per gallon. In other words, for one area you might have some folks (Tuesday) paying 90 cents per gallon more (or less) than others."
