The United States is down to 25 days of diesel supply with stockpiles at their lowest level for this time of year in records going back to 1993. In the Northeast, where more people burn fuel for home heating than anywhere else in the country, inventories are a third of their typical levels heading into winter. National Economic Council Director Brian Deese called the levels “unacceptably low.”
Global shortages and a market phenomenon known as backwardation are frustrating Biden administration efforts to bolster dangerously low domestic inventories and keep prices from soaring as winter approaches. By late October, diesel prices had risen for more than two weeks to 50% above where they were a year ago.
Meanwhile, natural gas supply appears to be rising in Europe. The European Union’s reliance on Russian gas and the risk that Moscow could cut supplies has pushed the bloc to target an 80% filling level of its storage sites by Nov. 1. The EU hit that target earlier this month, and the bloc’s storage sites sit at 93.6% as of late last week. In response, prices have been falling since.
“For the first time since August this year, yesterday, the gas prices on the Dutch stock exchange basically breached the hundred or so, [it] was below €100,” Czech Deputy Prime Minister Jozef Sikela said Tuesday. “It is an extremely positive message.”
Despite the low U.S. diesel supply and the high natural gas supply in Europe, the U.S. is exporting more natural gas to Europe. The has led to a buildup of natural gas vessels waiting to unload at ports with European infrastructure unable to handle the increased shipments.
60 LNG tankers have been idling or slowly sailing around northwest Europe, the Mediterranean and the Iberian Peninsula, according to MarineTraffic. These delays postpone the tankers’ return to the Gulf Coast of the United States to pick up the next load. As a result, natural gas inventories rise more than the market expected.