Tag Archives: diesel

Supply Chain going to get worse due to “Red Alert” on Diesel shortage

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Fuel Company Issues Diesel Shortage Warning, says US ‘Rapidly Devolving’
  • A major fuel supply company has issued an alert about diesel fuel shortages in several Southeastern U.S. states.
  • States that are expected to experience shortages include Alabama, Georgia, Tennessee, North Carolina, Virginia, and South Carolina, Mansfield Energy said in an alert last week. The company also noted “extremely high prices in the Northeast.”
  • “Poor pipeline shipping economics and historically low diesel inventories are combining to cause shortages in various markets throughout the Southeast,” the company said. “These have been occurring sporadically, with areas like Tennessee seeing particularly acute challenges.”
  • noted that fuel prices are 30 to 80 cents higher than the posted market average due to “tight” supply
  • Due to “rapidly devolving” conditions, the firm issued its “Alert Level 4” to address the volatility, according to the statement. For the southeastern United States, Mansfield said it is issuing a “Code Red” alert and is “requesting 72-hour notice for deliveries when possible to ensure fuel and freight can be secured at economical levels.”

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Trouble ahead as National Economic Director says we only have 25 days left of Diesel

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • The US now has just 25 days of diesel supply — the lowest since 2008. Here’s why that’s more alarming than a dwindling ‘oil piggy bank’
  • The U.S. is facing a diesel crunch just as demand is surging ahead of winter — with only 25 days of supply left, according to the Energy Information Administration.
  • National Economic Council Director Brian Deese told Bloomberg TV that diesel inventories are “unacceptably low” and “all options are on the table” to bolster supply and reduce prices.
  • New England’s stockpiles have been depleted to less than a third of its usual levels for this time of year, which is concerning since those states rely on fuel for heating more than other parts of the country.
  • But The Washington Post reports that diesel demand is so high, that if a million barrels of diesel were delivered from the Northeast reserves, they would be depleted in less than six hours.
  • The Biden administration also recently announced it would be tapping into the country’s emergency oil reserves to counter rising gas prices, despite concerns over the long-term efficacy.

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America runs on diesel but now there are fewer refineries then in 1980. Inflation could get worse

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Inflation is Going to Get Worse. Blame a Lack of Diesel
  • It cost Carl Smith $999 to refill the 275-gallons fuel tank of his semi-trailer on Sunday for a run from Ohio to Wisconsin—and that’s just because his fuel credit card cuts off at $1,000. In the nearly 40 years he’s been driving, the price of diesel fuel has never been that high.
  • The U.S. economy runs on diesel. It’s what powers the container ships that bring goods from Asia
  • The farmers who grow the food you eat put diesel in their tractors to plow the fields, and the workers that bring construction equipment to build your home put diesel in their trucks.
  • The price of diesel went above $5.50 a gallon in the beginning of May, and has stayed there ever since, a 70% increase from just a year ago. Diesel supplies have tightened just about every week since January and could continue to do so as more people fly, drive, and shop during the summer months, consuming more petroleum products.
  • Tom Kloza, global head of energy analysis for OPIS. “We’ve already seen the highest prices in our lifetimes, and it could go even higher.”
  • There are also fewer refineries, which process crude oil into diesel and other products, in the U.S. than were just a few years ago. There are just 124 now operating, down from twice as many in 1980, and down from 139 in 2016, according to the U.S. Energy Information Association. The northeast region is particularly spare, with just seven refineries today, down from 27 in 1982.

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If farmers can’t afford diesel there won’t be food in the grocery stores

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Could a food shortage be coming? Record diesel prices are crushing Pa. farmers, lawmakers told
  • Kotzmoyer told lawmakers diesel is a “huge, huge expense” for farmers. One Cumberland County farmer, he said, works about 3,500 acres with several diesel-consuming tractors and burns though about 2,000 gallons of diesel per month.
  • Average diesel fuel prices Tuesday in Pennsylvania were $6.19 a gallon, about 75% higher than a year ago, according to AAA.
  • Right now consumers are spending an average of $3,000 more a year on food and gas, because of inflation

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Short supply of Diesel on the heels of summer

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Diesel fuel is in short supply as prices surge — Here’s what that means for inflation
  • Diesel fuel is in short supply as demand rebounds following the pandemic, while supply remains tight.
  • Prices have surged to record levels, adding to inflationary concerns across the economy.
  • The problem is especially acute on the East Coast, where prices have become “unhinged,” according to one analyst.
  • “Diesel is the fuel that powers the economy,” said Patrick De Haan, head of petroleum analysis at GasBuddy
  • Higher prices are “certainly going to translate into more expensive goods,” said De Haan.

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Thieves targeting underground fuel tanks at gas stations

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • 1000 Gallons of Diesel Allegedly Stolen from Houston Gas Station amid Sky-High Gas Prices
  • The thefts allegedly occurred on consecutive days in which the national gas price average repeatedly broke all-time highs.
  • Thayil said a dark-colored van was seen parking over the underground storage containers and siphoned 360 gallons each day.
  • Nobody comes out, so they have a trap door inside their vehicle which is crazy. They have to have another man inside (the vehicle) to open our fuel tank, stick a hose in there.
  • “Altogether it was about $5,000.”

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U.S. demand for oil surges, depleting tanks in Oklahoma

By Stephanie Kelly

NEW YORK (Reuters) – Crude oil tanks at the Cushing, Oklahoma storage and delivery hub for U.S. crude futures are more depleted than they have been in the last three years, and prices of further dated oil contracts suggest they will stay lower for months.

U.S. demand for crude among refiners making gasoline and diesel has surged as the economy has recovered from the worst of the pandemic. Demand across the globe means other countries have looked to the United States for crude barrels, also boosting draws out of Cushing.

Analysts expect the draw on inventories to continue in the short-term, which could further boost U.S. crude prices <CLc1> that have already climbed by about 25% in the last two months. The discount on U.S. crude futures to the international Brent benchmark should stay narrow.

“Storage at Cushing alone has the potential to really rally the market to the moon,” said Bob Yawger, director of energy futures at Mizuho.

Cushing stockpiles have dropped to 27.3 million barrels, the lowest since October 2018, the Energy Information Administration said on Wednesday, or about half of where inventories were at this time a year ago.

Inventories have fallen because of a ramp-up in U.S. demand, which has encouraged domestic refiners to keep crude at home to provide fuel such as gasoline and distillates to U.S. consumers, said Reid I’Anson, senior commodity analyst at Kpler.

In addition, U.S. production has been slow to recover from declines seen in 2020. At the end of 2019, the nation was producing roughly 13 million barrels of oil per day (bpd), but in recent weeks has been less than 11.5 million bpd. At the same time, product supplied by refineries – a proxy for demand – is about just 1% below pre-pandemic peaks.

As a result, the spread between U.S. crude and Brent, has collapsed. The spread narrowed to roughly $1.09 a barrel this week from $4.47 earlier this month, which had been about the widest spread since May 2020.

In an additional sign of high short-term demand for U.S. crude, the premium for U.S. crude delivered this December versus December 2022 reached a high this week of $12.48 per barrel, most since at least 2014, according to Refinitiv Eikon data.

In the next three months, Rystad Energy expects refinery runs in the United States to increase by 500,000 to 600,000 barrels per day. This would outpace production gains of 300,000-400,000 bpd, and keep the spread between the two benchmarks narrow.

“Only if OPEC (the Organization of the Petroleum Exporting Countries) intervenes with more supply of crude or if COVID rears its ugly head again, curbing demand, this high volatility will come off,” said Mukesh Sahdev, senior vice president and head of downstream at Rystad Energy.

(Reporting by Stephanie Kelly; Editing by David Gregorio and Marguerita Choy)

Colonial Pipeline hit by network outage just days after hack shutdown

By Stephanie Kelly, Laura Sanicola and Jessica Resnick-Ault

NEW YORK (Reuters) – Colonial Pipeline is having network issues preventing shippers from planning upcoming shipments of fuel, the company said on Tuesday, just after the nation’s biggest fuel pipeline reopened after a week-long ransomware attack.

The disruption was caused by efforts by the company to harden its system as it restores service following the cyberattack, Colonial said, and not the result of a reinfection of its network. It did not say when the issue would be fixed, but said it was still delivering products scheduled by shippers.

Last week’s closure of the 5,500-mile (8,900-km) system was the most disruptive cyberattack on record, preventing millions of barrels of gasoline, diesel and jet fuel from flowing to the East Coast from the Gulf Coast.

Colonial has been using its shipper nomination system to schedule batches of fuel deliveries to bring flows back to normal. A prolonged network outage could prevent shippers from adding to or making changes to deliveries – which would hamper delivery across the U.S. southeast and east coasts just after the line reopened.

After the ransomware attack forced Colonial to shut its entire network, thousands of gas stations across the U.S. southeast ran out of fuel. Motorists fearing prolonged shortages raced to fill up their cars.

Colonial’s shipping nomination system is operated by a third party, privately-held Transport4, or T4, which handles similar logistics for other pipeline companies. T4 could not say when the issue would be fixed, and did not comment on whether its systems for other pipelines were affected.

As of Tuesday, more than 10,600 filling stations were still without fuel, according to tracking firm GasBuddy, down from more than 16,000 at the peak last week.

In North Carolina, one of the hardest-hit states, gas outages dropped below 50% on Tuesday, GasBuddy said. South Carolina, Virginia and Georgia all also had outages below 50%.

About 70% of gas stations in Washington, D.C., were still without fuel, down from around 90% over the weekend.

“The number of stations without gasoline is likely to drop under 10,000 today,” said GasBuddy’s Patrick De Haan on Tuesday.

(Reporting By Stephanie Kelly, Laura Sanicola, Jessica Resnick-Ault and Devika Krishna Kumar; Editing by Franklin Paul, Chizu Nomiyama and Marguerita Choy)

Canada sets new speed limits on trains carrying dangerous goods

(Reuters) – Canada on Sunday announced new measures to lower speed limits in trains hauling dangerous goods like diesel, gasoline and chemicals to reduce the risk of derailment, effective immediately.

Trains carrying 20 or more cars with dangerous goods will be limited to 35 miles per hour (56 kph) in metropolitan areas and to 40 mph outside metropolitan areas with no track signals, Federal Transport Minister Marc Garneau said https://www.canada.ca/en/transport-canada/news/2020/02/minister-of-transport-updates-ministerial-order-to-reduce-the-risks-of-derailment-of-trains-transporting-dangerous-goods.html in a statement.

Last week, Garneau announced a temporary speed limit after a Canadian Pacific Railway train hauling oil derailed and caught on fire near Guernsey, Saskatchewan, the second such derailment in the area in two months.

For higher risk trains, including those with any combination of 80 or more cars containing dangerous goods, the speed limit will be 30 mph for urban areas and 25 mph for areas with no track signals, the statement added.

Canada’s biggest railway, Canadian National Railway Co, said in a separate statement it supported the decision taken by Canada’s Transport Minister.

(Reporting by Mekhla Raina in Bengaluru; editing by Richard Pullin)

North Korea likely to pursue talks, South says in rosy New Year forecast

South Korean soldiers patrol along a barbed-wire fence near the militarized zone separating the two Koreas, in Paju, South Korea, December 21, 2017

By Haejin Choi

SEOUL (Reuters) – South Korea predicted on Tuesday that North Korea would look to open negotiations with the United States next year in an optimistic outlook for 2018, even as Seoul set up a specialized military team to confront nuclear threats from the North.

The U.N. Security Council unanimously imposed new, tougher sanctions on reclusive North Korea on Friday for its recent intercontinental ballistic missile test, a move the North branded an economic blockade and act of war.

“North Korea will seek negotiation with United States, while continuing to pursue its effort to be recognized as a de facto nuclear-possessing country,” South Korea’s Unification Ministry said in a report, without offering any reasons for its conclusion.

The Ministry of Defence said it would assign four units to operate under a new official overseeing North Korea policy, aimed to “deter and respond to North Korea’s nuclear and missile threat”.

Tensions have risen over North Korea’s nuclear and missile programs, which it pursues in defiance of years of U.N. Security Council resolutions, with bellicose rhetoric coming from both Pyongyang and the White House.

U.S. diplomats have made clear they are seeking a diplomatic solution but President Donald Trump has derided talks as useless and said Pyongyang must commit to giving up its nuclear weapons before any talks can begin.

In a statement carried by the official KCNA news agency, North Korea said the United States was terrified by its nuclear force and was getting “more and more frenzied in the moves to impose the harshest-ever sanctions and pressure on our country”.

China, the North’s lone major ally, and Russia both supported the latest U.N. sanctions, which seek to limit the North’s access to refined petroleum products and crude oil and its earnings from workers abroad, while on Monday Chinese Foreign Ministry spokeswoman Hua Chunying called for all countries to ease tension.

On Tuesday, Beijing released customs data indicating China exported no oil products to North Korea in November, apparently going over and beyond U.N. sanctions.

China, the main source of North Korea’s fuel, did not export any gasoline, jet fuel, diesel or fuel oil to its neighbor last month, data from the General Administration of Customs showed.

China also imported no iron ore, coal or lead from North Korea in November.

In its 2018 forecast, South Korea’s Unification Ministry said it believed the North would eventually find ways to blunt the effects of the sanctions.

“Countermeasures will be orchestrated to deal with the effects, including cuts in trade volume and foreign currency inflow, lack of supplies, and reduced production in each part of the economy,” the report said.

The latest round of sanctions was prompted by the Nov. 29 test of what North Korea said was an intercontinental ballistic missile that put the U.S. mainland within range of its nuclear weapons.

The Joongang Ilbo Daily newspaper, citing an unnamed South Korean government official, reported on Tuesday that North Korea could also be preparing to launch a satellite into space.

Experts have said such launches are likely aimed at further developing the North’s ballistic missile technology, and as such would be prohibited under U.N. resolutions.

The North Korean Rodong Sinmun newspaper said on Monday saying that “peaceful space development is a legitimate right of a sovereign state”.

North Korea regularly threatens to destroy South Korea, the United States and Japan, and says its weapons are necessary to counter U.S. aggression.

The United States stations 28,500 troops in the South, a legacy of the 1950-53 Korean War, and regularly carries out military exercises with the South, which the North sees as preparations for invasion.

(Additional reporting by Muyu Xu and Ryan Woo in Beijing; Writing by Josh Smith; Editing by Nick Macfie)