Another Crisis Under Biden Right Before the Election

Many things have gotten worse since Joe Biden took office.

As we count down to the midterms, there is still one crisis. Diesel supply is extremely low we only have a 25 days supply left.

According to Wednesday’s government data, diesel demand in the US is on the rise while supplies are at their lowest level ever.

As we head into winter, the Biden administration is concerned about the shortage of fuel for heating and trucking. This concern will also be a major concern for the November election. Brian Deese, Director of the National Economic Council, stated Wednesday to Bloomberg TV that diesel inventories were “unacceptably low” but that “all options” are available to increase supplies and lower retail prices.

According to Energy Information Administration, there are only 25 days of diesel supply in the US, which is the lowest level since 2008. The four-week rolling average of distillates provided, which is a proxy for demand and was at its highest level since 2007. Even though weekly demand has slowed slightly, it is still at its highest level in two years, due to higher heating, trucking, and farming use.

As if prices were not high enough, constrained supply drives prices up. This then impacts things like shipping and trucking with the ripple effect that rising costs.

At the moment, the retail average diesel price in America is $5.340. It was $3.579 last year, which is $1.761 less. Bloomberg notes that there is “market backwardation”, which means that delivery prices are higher than for future deliveries. This makes “building inventory extremely expensive, feeding into a vicious circle of tight supplies, price spikes, and more.”

We’re moving into winter, as well as the holiday season when there is a greater need for shipping.

It’s not just diesel. Epsilon Theory’s Ben Hunt explained that jet fuel and heating oils are also in short supply. The Fed’s efforts to curb inflation through interest rate increases did not help.

Bloomberg notes that some relief is on the horizon, with 1,000,000 barrels of oil expected to be shipped to New York and Delta Air Line’s trainer refining plant coming back online to increase its production. However, this won’t solve the ongoing problem.

This could be done by removing all restrictions on oil energy that have put us in this situation in the first place. To support the industry and not continue ripping off the Strategic Petroleum Reserve for your own benefit in the elections, this approach would work. This would mean that you have to commit to supporting the industry, not attacking it.

Joe Biden, a former 18-wheeler truck driver, would surely understand this. But he doesn’t seem to either understand or care.