Diesel Prices Break Price Record, in Delicate Supply Amidst Hurricane Season

Diesel prices continued to climb last week, rounding out Friday at a national average of $5.58/gallon. Combined with NOAA’s prediction of an above-normal hurricane season, Gulf Coast-area producers may be closer to an extreme fuel shortage.

One petroleum analyst said the U.S. is likely one Category 3 storm away from a shortage, particularly along the Mississippi River, where it could affect refining and offshore oil production. What’s driving the diesel shortage? A lack of refining capacity is the culprit, not necessarily an oil shortage.

The U.S. is dealing with about one million barrels per day less capacity than three years ago. While limited oil imports from Russia fuel the issue, internal processing into gasoline and diesel remains a hold-up. Refineries have been suffering from less capacity due to pandemic-era shutdowns and prior damage from Hurricane Ida last fall.

Read more on diesel supplies here.