Total oil shipments reached 11.4 million barrels per day, with gasoline and diesel exports jumping to two-week highs, according to the U.S. Energy Information Administration. Meanwhile, domestic fuel stocks in the United States are at a historic seasonal low, and fuel supply in the East Coast is about to run out (or be subject to quantitative ration).
This imbalance highlights the difficulty of transporting fuel from Gulf of Mexico coastal refining centers to East Coast consumption centers. Water transport between coasts is restricted due to the century-old " Jones Act ". The bill could raise transportation costs to U.S. ports, fuel prices are already so high, and global markets are so tight that carriers can make more money by shipping fuel overseas instead of supplying it to the domestic market. Meanwhile, demand from energy-deficiency Europe is slowing.
Low fuel inventories entering the winter have been a key focus of the Biden administration's midterm elections, and the Biden administration has been considering options such as export restrictions to increase supply. Doing so could save U.S. consumers $5 billion in gasoline costs, but could increase diesel costs by European trading partners by $2 billion and reduce U.S. refineries’ $30 billion revenue, according to analysis released Tuesday by WoodMackenzie.
crude oil exports alone also hit a new high of 5.1 million barrels per day, and the strong pulling effect from European buyer demand was at play throughout October. But traders warned that the data may be exaggerated because the so-called adjustment factor of the U.S. Energy Information Administration (i.e., the difference between inventory data and output, refining demand, import and export data) was also at a record high this week.
