[The Epoch Times, 27 ottobre 2022](Reported by The Epoch Times reporter Michael Wilkerson / compiled by Takasugi) With theBidenThe government continues to exhaust itself in a dubious betWE.Strategic Oil Reserve (SPR), inmid-term electionsdepressed anteriorgasoline priceTo win the vote, another fuel crisis in the United States is quietly brewing.
Althoughgasoline priceIt is true that it fell from the highs of this summer, butDiesel fuelPrices continue to rise. And more worrying,WE.Stocks of diesel have fallen to dangerously low levels.
According to the US Energy Information Administration (EIA), the United StatesDiesel fuelThe US average retail price increased more than 45% year-over-year to $ 5.34 per gallon. Wholesale diesel prices have risen above $ 200 a barrel in recent weeks, 92.5% above last year’s levels.
More worryingly, just last week, the US Energy Information Administration released data showing that the US system only had 25 days of diesel fuel left. Inventories are now at their lowest level since 2008 and their lowest level on record in October.
It is important to note that this is happening at a time when demand for diesel is at its highest level in the last two decades and ahead of what will be a particularly difficult winter.
As long as the market remains in retreat, i.e. current delivery prices are higher than future delivery prices, indicating that shortages persist, inventory rebuilding is unlikely.
The diesel market is important because it is the lifeblood of our economy. Let’s not forget that while gasoline powers consumers, diesel powers trucks, tractors and all kinds of heavy equipment, not to mention freight trains and ships. They in turn feed and ultimately provide everything we depend on in the modern world.
Whether it’s the U.S. food supply chain, where over 70% of final goods are transported by diesel trucks, or basic agricultural production, where agricultural equipment also runs almost entirely on diesel, or mining, drilling and construction, our key industries depend on diesel. In short, if diesel supplies are cut off, the US economy will collapse.
Other dangers expected in the future
While there is no clear link to diesel shortages, the United States runs the serious risk of a nationwide rail strike. Without a deal between railroads and unions by November 19, shutting down the rail system could cost the US economy up to $ 2 billion a day, not to mention the inevitable shortage of goods and supply chain disruptions. would arise.
The US produces and refines most of the diesel itself, but our ability to increase supply is still limited by the limited refining capacity of diesel. In fact, U.S. refining capacity hasn’t increased in decades due to burdensome regulations.
Therefore, the United States must rely on imports to supplement its energy needs. Against a backdrop of uncertain prospects for war in Europe and an environment where European countries themselves are facing a severe energy crisis at the start of winter, this appears to have exacerbated US energy risks. In the absence of an adequate supply of natural gas, demand for diesel could increase worldwide, with countries reluctant to export what little diesel they have.
Although this article focuses primarily on diesel supplies, we must also focus on the crude oil market and gasoline prices.
Global oil supplies remain uncomfortably limited. The US strategic oil reserve is now at its lowest level in nearly 40 years. despite this,BidenThe government still plans to continue consuming 1 million barrels of oil reserves per day, and that will continue untilmid-term elections。
then? The Biden administration says it will replenish the Strategic Petroleum Reserve when oil prices reach around $ 70 a barrel. But until then, we will be faced with a dangerously low reserve of emergency supplies. As winter approaches and the European energy crisis (and the ongoing Ukrainian war) enters a more dangerous phase, our emergency supplies will remain at less than half capacity.
If we think the Saudis and their OPEC friends are mistreating America right now, only then will we discover the true nature of this beast when we are truly vulnerable.
At best, we will have the privilege of repurchasing and storing the Strategic Petroleum Reserve at a higher price than what we sold. What is it for? Just to get some votes in the mid-term elections.
And the worst case scenario? Let’s just hope that in the meantime there isn’t a real energy crisis.
Finally, I would like to make a fundamental point, that an energy crisis will inevitably lead to a food crisis. This is an almost immutable law.
The double danger of diesel shortages and the closure of national railways poses a real threat to our food and other supply chains this winter. Note that all of this is happening with parts of the Mississippi River currently closed.
The Mississippi River is the most important waterway of transportation in the United States. But just a few days ago, 700 barges loaded with grain and other food products were suspended due to the low water level caused by the drought.
Currently, threats to the US food supply chain are increasing every week. It is time for Americans to wake up, pay attention to the problem and start preparing for a winter that may be different than what they have experienced before.
Michael Wilkerson is an investor, strategic advisor and founder of Stormwall. He is the author of a forthcoming book, Why America Matters: The Case For a New Exceptionalism, due out in October 2022.
This article represents the views and opinions of the author only and the content is for general information reference only, without any recommendations or solicitations. The Epoch Times does not provide investment, tax, legal, financial, property or other personal financial advice. The Epoch Times does not guarantee the accuracy or timeliness of the content of the articles.
Responsible editor: Ye Ziwei #
