Last week I sounded the alarm that the U.S. could face a diesel shortage heading into the October peak demand season. Now, we are just one week away. In today’s video, we’re moving past broad warnings and looking at the hard numbers. I've built a model to estimate our potential shortfall in October—including whether our tight inventories could breach physical minimum operational levels in the worst case scenario and send record-high prices surging even further.
This seems like a good analysis of US distillate markets to me. The only bias I can pick up from his videos on this subject is that he's against exporting diesel, but doesn't seem like a MAGA goober at first glance.
In his status quo projection at around 20 minutes in, it would only be the worst diesel shortage in decades with prices still increasing through October at least. That's if US refineries defer normal seasonal maintenance and keep running at peak capacity, which I don't believe could have any consequences.
In the worst case scenario at 22m, US refineries doing seasonal maintenance and exports remaining elevated results in a national diesel inventory 15% below the amount of fuel needed for production and physical diesel shortages become expected.