Cold Is One Thing, This Weather Is Crazy!

What will it do to diesel fuel prices?

It hasn’t just been cold, it has been extremely cold with no clear end in sight. It has diesel fuel prices turned all around because, in a fair amount of places, you can’t get it. The National Weather Forecast for the next 10 days continues to show bone chilling temperatures on the body and trying times for diesel fuel not to gel up, so it doesn’t look like a Bill Cosby pudding pop.

Why are we have these issues?

Let’s take a quick snap shot of what has happened:

  • Winter storm Leon basically crushed the Southeast with snow, ice and plenty of road closures. It might not been as bad as people say in Chicago have had it but when you don’t have equipment and experience in that kind of mess, it can really mess with you.
  • Throughout the Midwest, several days of below zero weather during the day and nights reaching below minus 15
  • Snowfall and single digit weather or colder throughout the Northeast, like it was Alberta, Canada instead of New York City

These extreme conditions have currently caused the following:

  • Almost no #1 (kerosene) to blend fuel
  • Very low supply and backorders with many of the fuel additive companies
  • Complete terminal fuel outages through Ohio, Detroit, Western PA and South Eastern U.S.
  • Delays for bulk deliveries to terminals and truck stops due to ice, snow and poor driving conditions

With below average cold still in the forecast, what can we expect next?

  • Increased diesel fuel cost because, in some cases, it might need to be driven hundreds of miles to get it to its destination
  • Continued terminal outages, happening at random places everywhere east of the Mississippi

A lot of these underlining issues are happening because large power plants and factories that normally run on natural gas have been forced to use diesel fuel. When it gets cold like this, natural gas goes to residential locations first. All of the industrial users have diesel fuel as back up.

Additionally since the spread in fuel costs between the Southeast and Northeast is very large, it has pushed suppliers to ship finished product to the Northeast first, which has caused the shortages in the Southeast.

It is like a big Rubik’s Cube right now but, like the weather, it will change soon.

Call today and stay ahead of tomorrow 267-482-6155.

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