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After reporting the lowest inventory since 2008 right when the high-demand season was approaching, U.S. diesel supplies have slightly increased in early November, though prices for the distillate fuel remain high.
When the Energy Information Administration (EIA) reported in mid-October that, as of October 14, the country had 25.4 days left of distillate supplies—which include diesel, jet fuel and heating oil—analysts and experts started fearing a supply crunch that could potentially lead to a significant slowdown of the U.S. and the global economy.
But while fears haven't completely dissipated, there has been some small progress in the country's replenishment of its dwindling inventories.
How much diesel is left in the U.S.?
Patrick De Haan, GasBuddy's head of petroleum analysis, told Newsweek: "We've seen distillate supplies rise slightly to 26.0 days, and inventories last week rose about 400,000 barrels, while the areas with the lowest inventories saw a well-needed rise in supplies as well."
Though the diesel shortage is affecting the entire country, inventory are particularly low on the East Coast, with the North East experiencing the highest diesel prices, according to Georgia-based major fuel supply and logistics company Mansfield Energy. The South East is reporting the worst supply outages.
A combination of high demand and low inventory caused by the decreased capacity of U.S. refineries—many of which have closed since 2020 or have been repurposed—and bans on the imports of Russian petroleum products have caused the diesel shortage. It has left farmers and homeowners struggling on the verge of a challenging winter.
While rising inventories are certainly good news for the U.S. economy, diesel prices remain high. The national average is of $5.359 per gallon, lower than November 13's average at $5.362 per gallon but higher than last week's average of $5.338 per gallon and October's average of $5.215 per gallon, according to the American Automobile Association (AAA).
On June 19, 2022, diesel reached its highest-recorded average price at $5.816 per gallon.
"Transportation costs continue to rise due to the tight supply, with average diesel prices holding around $5.36 a gallon nationally, but some areas are seeing diesel over $6 a gallon," said De Haan.
"I'm hoping it might improve, but if it's a cold winter, heating oil, which is very similar to diesel, could see higher consumption. We may make it through winter—but barely."
According to an update by the IEA on November 9, heating-oil prices have increased amid the start of winter, usually a season characterized by high demand for diesel, even if temperatures have been unusually mild.
Despite the past six weeks being warmer than on average, "residential heating-oil prices have increased in recent weeks," writes the EIA, reaching "a record-high of $5.91 per gallon (gal) the week of November 7 (data going back to October 1, 1990), after adjusting for inflation."
Heating-oil prices have been the highest in the Central Atlantic region, with low supply and strong demand driving prices up in the North East.
That is the region that uses the most heating oil across the entire country, with the U.S. Census Bureau's 2020 "American Community Survey" (2021 estimates) finding that about 18 percent of households in the North East and 33 percent of households in New England alone use heating oil as a primary space heating fuel.
Despite the likely difficult future scenarios, De Haan thinks there's not yet need to panic.
"Refiners are running hard and doing their best to produce more," he said. "If demand falls, we may get enough breathing room for supply to rise."
About the writer
Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property ... Read more