United States President Joe Biden is struggling to address the current oil issue as diesel demand is surging across the country and suppliers remain at the lowest seasonal level based on government data released on Wednesday.
The shortage of supply is a key concern for the Biden administration as the nation heads into its winter season and is seen as a crucial factor ahead of the midterm elections. In a statement, National Economic Council Director Brian Deese said on Wednesday that diesel inventories are "unacceptable low" and "all options are on the table" to increase supplies and reduce retail prices.
US Gas Shortage
The United States currently has only 25 days of supply of diesel, which is the lowest recorded since 2008 based on the Energy Information Administration. Concurrently, the four-week rolling average of distillates supplied, a proxy for demand, jumped to its highest seasonal level since 2007.
Despite weekly demand dropping slightly, it is still seen at its highest point in the last two years amid higher trucking, farming, and heating use. Furthermore, the diesel crunch comes just weeks before the midterm elections and could drive up consumer prices who are already struggling with inflation, as per Bloomberg.
Retail prices have also been consistently increasing for more than two weeks, with the price being at $5.324 per gallon, which is 50% higher than the same time last year. National supply has drained as refiners entered maintenance season and amid Russia's war on Ukraine tightening global stockpiles and limited imports.
Fortunately, some relief is on its way to address the issue as at least two vessels carrying roughly one million barrels of diesel are set to arrive in New York. They were diverted from their original destinations in Europe.
According to Jalopnik, the situation is a major headache for President Biden and the Democratic Party as they struggle to shore up support for the midterm elections. But worries are somewhat alleviated as a diesel refinery in Trainer, Pennsylvania, is expected to return from seasonal maintenance soon.
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Joe Biden's Plans
Just a few days ago, Biden announced the release of 15 million barrels of oil from the nation's Strategic Petroleum Reserve in an attempt to drive the cost down. In a speech at the White House, the Democratic leader said that they were trying to stabilize the markets and decrease prices.
Biden's move completes his administration's 180-million-barrel release plan that was first outlined in March. It also comes after OPEC+, an alliance between the cartel and several other major oil-producing nations, announced production cuts.
Furthermore, the Biden administration accused the group of supporting Russia and pledged to respond to the decision. The US president directed his administration to be prepared for further releases from the SPR if needed in the following months.
The White House also released a fact sheet that noted President Biden told the Energy Department to "be ready to move forward with additional, significant SPR sales this winter if needed due to Russia or other actions disrupting global markets," US News reported.
