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Sentinel Economics - Why The U.S. Diesel Crisis Escalates in 1 Week (www.youtube.com)
submitted 2 days ago by to c/videos@hexbear.net
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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.

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[–] [S] 14 points 2 days ago* (7 children)

i-told-you-dog I warned you about secondary distillates bro I told you dog.

This is the megafucker and I think his worst case scenario is probably a conservative estimate with the wider geopolitical context. Export controls will only compound the crisis they hide so putting faith in them seems super misguided. Any real diesel shortage is going to have wildly chaotic effects throughout the entire economy, way more so than the additional 20-30% consumer inflation I'm already anticipating in the short-term. With the economy already only being held up by everyone betting their pensions on The Calculator That Jerks You Off If You Feed It A Rainforest, that's proper 1929 territory.

Your daily intrusive thought that it's a good time to buy an ebike.

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  • [–] 8 points 2 days ago (6 children)

    So is the Naphtha Clot going to happen eventually? Or was this guy off base?

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  • [–] [S] 9 points 2 days ago* (3 children)

    shrug-outta-hecks I can see the tsunami approaching but it has so many variables that I don't know where to run. From the onset of the war I knew this was going to be The Big One for oil markets and immediately shifted into 1970s mode personally. This specific supply crunch is something I knew would almost certainly happen, but I figured it would happen by early summer because I didn't anticipate Chinese intervention that stalled the supply shock globally. Now we're starting to experience the things that would have happened then if China didn't draw down its consumption. That has maintained a naphtha shortage and kept the price elevated.

    To that end I think the worst case scenarios from Spring are still totally valid if not more plausible. More oil infrastructure has been destroyed, the backup oil trade route is now closed, the US Navy has totally withdrawn beyond Iranian missile range, and Trump is caught deeper in an escalation trap. Neither the Iranian or Ukrainian wars seem like they'll end before 2027. Paper oil's price is now vibes-based in such a weird way that I treat it like NFTs rising and falling in value through celebrity endorsements, and I can't tell what the actual physical supply is or how it's shifting around in such a chaotic environment. US refineries trying to oversupply while deferring maintenance would also be like opening another front in the war against itself since they're already infamously unsafe, so who knows how that or a post-export ban global market would play out.

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  • [–] 4 points 2 days ago (2 children)

    Hmm, ya. In your opinion, do you think we have long before the unleaded prices start shooting up along with diesel's?

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  • [–] [S] 8 points 2 days ago (1 child)

    I doubt there will be much of a lag time. All that gasoline is transported by diesel trucks, diesel trains, and ships running bunker fuel. Currently it seems like the costs are starting to erode the edges of those systems. Owner-operator truckers in particular are reporting $1000 fill-ups and trying to build toward an October strike. That's upwards of 15% the national trucker fleet, with the corporate truckers using it as an opportunity to price gouge retailers that are already trying to sell things we can't afford. There's also the element of consumer anxiety which COVID taught me is hard to predict. Fuel shortages will come from both the lack of delivery and people panic buying before that hits.

    At least personally I'm treating this week's prices as the floor for the rest of the year. When the things driving the crisis aren't resolved and are feeding into each other the longer they go on, the only certainty is that the best time to buy anything is yesterday.

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    • [–] 5 points 2 days ago (3 children)

    Someone on here last week talked about having "only a small amount" of gasoline on hand in reference to their stored 50 gal. (200 l. for our civilized comrades). I thought that seemed like an ample buffer, now it sounds restrained and I'm feeling practically nekkid without a 5gal jerry can squirreled away.

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  • [–] [S] 8 points 2 days ago (2 children)

    The big image of the 1970s oil crisis for me is a line of cars using their last drops of fuel to idle in the line for a pump running dry. There's at least a realistic chance of that happening during what will be a historic El Nino, which itself will probably have compounding effects on the supply chain. I'd definitely buy a jerry can if I had a place to store it safely.

    A proper bike probably buys more security though. The best case scenario is that I'm paying like 50% more to drive to places where I'm charged 50% more, working a job where the fuel costs are eating into their budget and I'm not getting raises to offset any of that inflation. Car dependency just isn't going to be economically practical and we'll be forced out of that whole spatiotemporal relationship to the land with or without adjusting first. Like with any of the climate change degrowth, 20th century overdevelopment was paid for on credit and we have to learn to be comfortable living more simply as those systems face terminal decline. The only alternative is running off the cartoon cliff and hoping we never have to look down. Whatever move you can make away from cars now will be much less expensive than trying to do it a few years from now.

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  • [–] 3 points 2 days ago (1 child)

    I remember you were proselytizing for cargo e-bikes a few months ago and even dropping links for all the badass and surprisingly affordable safety gear to go with them! I was fully convinced but looking around on ye olde Google maps it seems untenable locally between the lack of bike lanes and the er quality of local drivers. Maybe I will reconsider.

    But yah I think a lot of people take for granted that they can live in far flung suburbs, commute to work & travel by car, and have the store shelves stocked and treats delivered but that's all resting on complex and not very resilient networks. I don't know if I'm more frustrated by Boomers who think that is good and sustainable or Zoo-linnelials who want to continue that and don't see the cracks in the structure.

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  • [–] [S] 4 points 2 days ago

    The only good thing about the crisis deepening is that there will be fewer cars on the road to make cycling dangerous. I'm this pessimistic as someone with a 40mpg econobox, the most efficient car I could own outside of an EV yet something I don't think I'll be able to afford to use by this time next year. All the emotional support trucks and tactical assault minivans are going to be the first things off the road. Here our entire bike trail network developed out of the 1970s crisis inducing demand for rapid transformation, and I think we're going to have another similar moment of mass adoption if this crisis worsens. By the time that happens, early adopters will have made a comfortable lifestyle out of biking and built a valuable skillset with maintenance. The people scrambling to convert by then will be buying their bikes and gear off the backs of diesel trucks.

    If I can control nothing else about the crisis, the one thing I can ensure is that I'll always have 30-50 miles of range for a heavy load. Being able to get to the next city over in a reasonable timeframe opens up so many opportunities no matter how bad things get.

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    • [–] [B] 2 points 2 days ago

    I found a YouTube link in your post. Here are links to the same video on alternative frontends that protect your privacy:

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