U.S. energy supplies continue to decline

Booming interstate transportation and lower production have left the United States with record low pre-winter heating fuel stocks last reached two decades ago.

The supply shortage comes as global natural gas shortages raised US fuel prices to a 12-year high earlier this week, prompting some power plants to switch to non-oil use. The negative effect of this will affect consumers, significantly increasing their heating costs this winter.

The increase in heating costs in the winter will significantly limit the free funds in the household budget, resulting in a contraction in the consumption of goods and services, which in turn will have a negative effect on business, limiting corporate income.

The stocks of diesel used for heating and transportation are sufficient to meet demand in the next 31.2, the shortest duration for this time of year since 2000, according to the Energy Information Administration.

Nymex Diesel Futures traded at $2.45 a gallon after jumping to a seven-year high earlier this week.

Tightening could worsen as truck drivers face rising online shopping and historic slowdowns in the global supply chain. Midwest farmers are coming out with their tractors, harvesting the second largest corn ever produced.

The timing can’t be worse, as many US refineries typically stop production during this part of the year to carry out the necessary maintenance.

Charts: with permission of Bloomberg Inc.

 Junior Trader Nikolay Petrov


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