Diesel Margins Top $100 a Barrel to Reach Record High as Supply Crunch Grows

Animats•about 1 hour ago

This is a refining capacity problem, not an crude oil supply problem. The various wars have taken out refining capacity and transport capacity.

On the crude oil side, the US strategic petroleum reserve is declining rapidly.[1] That took a hit during COVID and the early Ukraine war because production was down. Refilling started afterward, but didn't take it up to normal levels. There's still maybe a year of oil left.

[1] https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W...

lovich•about 1 hour ago

Doubt there’s a year. They’re currently draining it down to like 270-280ish million barrels. Which is breaking the integrity of the caverns and they can’t actually drain it completely it needs something like 100ish million barrels at minimum capacity to not fuck up the pipes.

On the integrity side. The caverns were only designed for a lifetime of 5 full drawdowns[1]. The caverns the oil is stored in and the pillars supporting them are made of salt. They get the oil out by pumping water in which floats the oil up.

Salt has certain integrity problems when submerged in water or so I’ve been told.

This current admin doesn’t appear to accept the idea of negative consequences for their actions so I would not be surprised if they destroy the caverns because they think they can suck every last drop out.

[1] https://www.msn.com/en-us/money/markets/frequent-oil-draws-f...

neaden•about 1 hour ago

It's very annoying that the cost of fixing all this and replenishing the stockpile is going to most likely fall on people who had little to nothing to do with it becoming such a big problem.

MomsAVoxell•37 minutes ago

Just like any war, ever.

This is why we don’t start wars, kids.

27183•38 minutes ago

The cost of fixing this will be everyone's problem. If we suddenly have to ramp up domestic production because diesel is >$10/gal it'll be a no holds barred unmitigated environmental catastrophe. We will be drilling and spilling absolutely everywhere, because the alternative is dead people in the streets.

Emergencies like this are one nightmare scenario accelerant of climate disaster.

ck2•12 minutes ago

highest Diesel price per gallon national average was $5.81 after covid June 2022

we are most certainly going to break that by the end of the year (it's $5.47 average today)

they are trying to use Strategic Oil Reserve (and maybe Venezuela) as a piggy bank

but all that's about to break badly, permanently

if this administration lets it go down to 70 million barrels despite the warnings by experts at 300 million, they'll never repair the damage

martythemaniak•about 1 hour ago

I think declaring the Straight of Hormuz a US territory will solve this problem.

MomsAVoxell•36 minutes ago

Declaring the US an enemy to the free people of the world is going to solve it, that’s for certain.

cjbenedikt•34 minutes ago

How? Or was it sarcasm?

duttish•27 minutes ago

Personally I assume there was an implied /s at the end

pbkompasz•2 minutes ago

I can imagine Pete Hegseth saying that exact sentence to President Trump.

cyberax•23 minutes ago

That's apparently the latest bright idea out of the White House.

And no, that's not out of The Onion.

toomuchtodo•about 2 hours ago

https://archive.today/FXENu

https://en.wikipedia.org/wiki/Crack_spread

https://rbnenergy.com/market-data/3-2-1-crack-spread

https://www.eia.gov/todayinenergy/detail.php?id=1630

https://financialpost.com/news/posthaste-an-energy-shock-muc...

Diesel Margins Top $100 a Barrel to Reach Record High as Supply Crunch Grows

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