(Bloomberg) -- The fuel crisis on America’s East Coast is deepening as terminals running low on diesel are now down on gasoline, too.
“Numerous” terminals are out of gasoline and ethanol over the past 72 hours due to various supply delays, according to distributor TAC Energy. Rallying futures show the reason “is more short squeeze caused by a variety of disruptions in supply, rather than an expectation of strong gasoline demand,” TAC wrote in a note.
The prompt-month gasoline spread surged above 30 cents a gallon on Tuesday in a worrying repeat of the market structure that precipitated the still-unfolding diesel shortage on the East Coast: Prompt deliveries are worth a lot more than longer-term ones, which incentivizes suppliers to sell now instead of building inventory.
Read the QuickTake: What ‘Backwardation’ has to do with the US diesel squeeze
Gasoline stockpiles on the East Coast have dwindled to their lowest seasonal level on a calendar basis since 2007, according to Energy Information Administration data released Wednesday. The US region relies on Europe for gasoline imports, particularly during crunch times. Europe has not been sending as much recently as the continent grapples with its own energy crisis.
East Coast shortages have worsened at a politically sensitive time: Voting has begun in midterm elections where fuel costs, a major driver of historic inflation, are a top issue for many deciding if Democrats will maintain control of Congress.
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