Diesel and oil supplies out in the Northeast are more than fifty percent below the recent average. Furthermore, gasoline inventories in New York have been so low recently, that suppliers have been looking to U.S. vessels to move fuel into the region – which is an expensive option – to help combat the potential for shortages.
Something else to note is during this time of year diesel usually rises, because of annual crop harvest season and distributors trying to stock up ahead of the upcoming heating season.
Let’s Break It Down
Data from a survey conducted by the Department of Energy and reported by Transport Topics shows that diesel fuel and heating oil are sixty-three percent below the five-year average in New England, and fifty-eight percent below the same average from Maryland to New York.
These low inventories are significant because of how dependent the Northeast is on heating oil, as they use that oil to help keep homes warm in the winter. Specifically, around twenty-four percent of homes in Massachusetts and more than sixty percent in Maine, rely on heating oil – data shows.
Another reason is, it could cause disruptions during active hurricane season. Transport Topics documents that if a severe weather event were to occur, that fuel is usually consumed by Middle Atlantic states and Maine, as that fuel comes from Gulf Coast refineries, which could create issues.
Michael Ferrante, of the Massachusetts Energy Marketers Association says that even with this concern, it should be noted that suppliers and retailers are working well together. He continues to say, that inventories will increase in September and October, which would ease the immediate concerns – and he feels optimistic that there will be a sufficient amount of heating oil.
Jennifer Granholm, Energy Secretary, will hold a meeting with New England governors and energy directors after Labor to assess the situation. But in a letter, she urges governors to take preventative action to ‘shore up’ fuel supplies in the next few weeks to help avoid any problems, AP News reports.
Additionally, the Energy Department has a heating oil reserve that they have created for potential emergency situations; it holds one million barrels in terminals in the Northeast.
We will continue to provide updates on the latest in the industry and more throughout the year and beyond. As always, should you have any questions or comments, please don’t hesitate to reach out to our team today!