The EIA Expects Diesel Pressure Throughout 2027
The latest short-term energy outlook report from the Energy Information Administration (EIA) shows diesel prices will remain elevated through 2027 as refineries try to catch up. Inventories are too low, and the report expects problems in Russia and the Middle East to persist through the winter. Here is how the EIA characterized the current situation domestically:
“East Coast distillate fuel inventories fell 32% below their five-year seasonal average in September. Although we expect inventories to recover, they remain about 20% below the 2021-2025 average through the upcoming winter, per our forecast. We expect ongoing global supply constraints will keep inventories below normal through the forecast period.”
A cold snap in the Northeast starting this weekend could boost near-term heating oil consumption and possibly push prices higher. Diesel prices were estimated nationally at $6.30 a gallon, 70% higher Y/Y ($8.41 in California).
A Hint of Trouble in AI Debt?
In a note from Holger Zschaepitz on CoreWeave debt, Elon Musk simply responded on X with: “Yikes.”
The chart below shows the Credit Default Swap (CDS), which is the probability of a default on their debt over time. Whether or not this happens, investors see challenges in the AI market and are demanding higher returns before taking on that risk.
In other terms, CoreWeave’s current bonds yield 15%, and the CDS shows a 58% chance of default within 5 years. The chart shows this relationship over the past 13 months.
Read more about how this, along with financial developments and other global issues, could affect your supply chain.
