The US Is Exporting Record Oil and Fuel Even as East Coast Faces Shortages
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The U.S. exported a record amount of crude and fuel in mid-October, even as the East Coast grapples with shortages of both diesel and gasoline.
Total petroleum shipments reached 11.4 million barrels a day, according to the Energy Information Administration, with exports of gasoline and diesel jumping to two-week highs. At the same time, domestic fuel inventories are at historic seasonal lows with pockets along the East Coast running out of — or rationing — supplies.
The imbalance highlights the difficulty in moving fuel from the Gulf Coast refining hub to consumer centers on the East Coast. Waterborne shipments between coasts are limited due to the Jones Act, a century-old law that can raise the cost of shipping to U.S. ports. Fuel prices are already so high and global markets so tight that shippers can make more money by sending fuel overseas rather than supply domestic markets. At the same time, imports from energy-starved Europe are slowing.
Low fuel inventories headed into winter — and against the backdrop of midterm elections — have been a key focal point for the Biden administration, which has mulled instituting export curbs among other options to bolster supplies. Doing so could save U.S. consumers $5 billion in gasoline costs, according to analysis by WoodMackenzie released Oct. 25 — but could raise diesel costs by $2 billion to European trading partners and erase $30 billion in earnings from American refiners.
Exports of crude alone also hit a new high of 5.1 million barrels a day, with the pull from Europe strong through October. But traders cautioned that the figure could be overstated with the EIA’s so-called adjustment factor — the difference between stockpile numbers and those implied by production, refinery demand, imports and exports — also at a record high for the week.
— With assistance from Jennifer A. Dlouhy and Jack Wittels.
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