Recent reports that the US currently has a 25-day supply of diesel fuel (the lowest level since 2008) have caused alarms for many people who work in the industry. But it may not be as bad as the media is making it seem. Consider the table below:
As much as 15 million barrels of crude oil will be sold between now and December; coming directly from the U.S. Strategic petroleum Reserve. Director of the National Economic Council Brian Deese described the levels in reserves as “unacceptably low.”
From a cost perspective, it looks like the price of diesel fuel will continue to slowly rise going into the winter. A relatively common trend given the current geopolitical environment paired with energy markets trends and patterns.
Although rising prices take a toll on business profitability, there are still things that you can do to reduce the cost. Tractor Performance Software, Fuel Card relationships, strategic route planning, and incentivising drivers to prioritize efficiency are a few.
Nationally the diesel prices are over $5/gallon on average. But in some regions like in the south east, prices are between $3.20-$3.58 per gallon.
In locations like the New York Harbor, prices have jumped this week to more than $200 a barrel. The profit from converting a barrel of oil into a barrel of diesel, or the “diesel crack spread,” has reached a record high of $86.5 per barrel, up almost 450% from the average of $15.7 per barrel between 2000 and 2020.
Read our latest article on “How Factoring Companies Help Trucking Companies During Turbulent Times“.