Diesel fuel in the Midwest surged to its highest premium since 2008 after inventories slipped for a third week and U.S. corn and soybean crops were harvested at the fastest pace since at least 1981.
Stockpiles of the region’s distillate fuel, a category that includes heating oil and diesel, fell by 1.87 million barrels to 29 million last week, the Department of Energy reported. About 41 percent of the U.S. crop was harvested as of Sept. 30, compared with 15 percent a year earlier, according to the Department of Agriculture.
U.S. farmers are gathering crops at the fastest pace in three decades this season, boosting demand for diesel fuel used to power combine harvesters.
The premium for ultra-low-sulfur diesel in the Mid- Continent rose 13 cents to 32 cents over heating oil futures on the New York Mercantile Exchange at 4:13 p.m. New York time, the highest level since Sept. 29, 2008.
“That’s a temporary squeeze,” said Mark Anderle, a trader at Truman Arnold Cos. in Dallas. “It’s following a seasonal pattern and harvest has been accelerated this year because of the drought. By the end of October it will correct.”
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