Posted by john in la on November 13, 2022 at 06:50:01 from (97.80.68.11):
In Reply to: Diesel Shortage posted by whizkidkyus on November 12, 2022 at 21:58:15:
I tried to explain this last week but I guess some did not see it. I will not address the political side of this. All one has to do is ask why would anyone in DC want diesel over $6 a gallon in November and they can see how far fetched that is.
So lets look at real facts. I will address the north east because we have plenty diesel in the south east. The north east is north of I 40 and east of the Mississippi.
We have for years exported diesel to Europe. We have for years imported diesel from Europe to the north east U.S.
Now lets go back 2 years. The whole world shut down. Oil went below $0. We had jet fuel and gasoline coming out of our ears. Refineries were forced to slow production. Since diesel sales were still strong through heating oil and road trucks we lived off stored reserves that the system always keeps on hand. Not a big deal because when they come back online they will just replenish the supply line.
Then we were hit with a one two punch. Not one but I want to say two refineries in the north east went down from explosions and fire. I want to say they were in Ohio. This cut supply to the north east.
Then we have the war. Sanction Russia we do not care how high the price of fuel goes. So a major supply of diesel to Europe was cut off. They look to the U.S. to meet this supply shortage. And they are willing to pay for it at higher than U.S. prices.
So while we have plenty diesel on the gulf coast; where the biggest refineries in the U.S. are lets see how this plays out. There is only one pipeline between the gulf coast going up the east coast and we have to keep sending a share of gasoline. We can not just send diesel all the time. The supply from Ohio is cut off. The supply from Europe is cut off. The Jones act prevents us from loading ships in the gulf and sending them to the north east U.S. And Europe is willing to pay dearly for our gulf coast diesel.
If I was a oil company I would be doing just as they are. Load my diesel on a ship and send it to Europe. This will give me record profits.
And that is the facts and will remain the facts as long as the Jones act is in place and we sanction Russia because I do not see us replacing or building any new refineries in the north east. So get use to paying Europe prices for diesel.
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