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Potential Biden Plan to Stock Up On Diesel May Bring Price Surge

  • Storage mandate may take fuel off the market when most needed
  • Supplies from Europe are at stake in the coming months
Joe Biden

Joe Biden

Photographer: Ting Shen/Bloomberg
Updated on

US President Joe Biden is considering forcing the nation’s fuel suppliers to keep a minimum level of inventory in tanks this winter as a means of preventing heating oil shortages and keeping prices affordable. It may actually do the opposite. 

Such a requirement would essentially sideline fuel supplies in the market today and divert them into tanks for safekeeping -- a shift that could create a demand surge in the short term and an ensuing spike in prices. “It would result in product that would typically be exported going into storage,” said Jason Gabelman, an analyst at Cowen & Co., driving up prices in the Northeast without bolstering supplies in the market.