East Coast distillates stockpiles, comprised of diesel and heating oil, drained to a new low in records going back to 1990, according to weekly data from the Energy Information Administration. Gasoline inventories in the New York-region fell to their lowest level for this time of year in records going back to 1993.
Tanks are draining even as Gulf Coast fuel makers send as much gasoline and distillates as can fit on the Colonial pipeline to the East Coast. Local refiners increased run rates to 98.2%, the highest level since July 2018, and imports for gasoline and distillates rose. Still, the efforts to restock inventories were offset by a rise in weekly national demand.
“Shortages will gain momentum,” said New York billionaire and fuel station owner John Catsimatidis in an interview with Bloomberg. “Diesel will be rationed,” he said, repeating a pronouncement he made last month.
The region’s precarious fuel supply balance signals that already record-high prices could rise further, undoing efforts to ease the burden on consumers. New York gasoline reached the highest ever on the last day of May, according to data from auto club AAA, but have slipped since a fuel tax break took effect on June 1.
The East Coast is among the most vulnerable US regions to supply disruptions after losing both local refining capacity and plants in Canada and the Caribbean that were major suppliers to New York harbor in the last decade. The Irving St. John refinery in Newfoundland, a major supplier to the Boston area, began maintenance in mid-May on gasoline-units, further exacerbating the Atlantic region’s tightness.
US gasoline futures settled at a fresh record of $4.19 a gallon on Thursday.