This fireside chat recap is from FreightWaves’ Fuel Buyers Summit
FIRESIDE CHAT TOPIC: The future of fuel prices and the instability of the nation’s fuel networks
DETAILS: A look at domestic supply and fuel prices headed into peak season
INTERVIEWER AND SPEAKER: Scott Berhang, director of FreightWaves Academy, and Patrick De Haan, head of petroleum analysis for GasBuddy.
BIO: De Haan has been analyzing fuel prices and trends for over 15 years. He provided expertise to authorities during Hurricanes Harvey and Irma and is regularly cited in U.S. periodicals and news broadcasts for his knowledge on various topics including oil, fuel prices, motor fuel taxation, gasoline demand, pipelines and retail fuel outlets.
KEY QUOTES FROM DE HAAN:
On the fragility of the nation’s fuel networks: “The fuel networks in the U.S. are very much hand to mouth. That is, there is not a whole lot of grace period for when a pipeline goes down. It can affect fuel networks very quickly, and that ripples across entire logistics chains. Not just motorists were affected by challenges this summer, but COVID-induced challenges, even with airlines out West, where the trucker shortage that’s been ongoing for several years made it very difficult for commercial airlines at small airports to refuel.”
On domestic supply: “Well it’s been a challenge made worse here very recently by some of the Atlantic tropical storms we’ve seen, some hurricanes that have disrupted various aspects of the fuel networks. The Colonial Pipeline was shut down for Hurricane Ida briefly, again for Nicholas. A loss of power, refineries have slowed down because of the damage inflicted by Ida. Oil production has slowed down. So, at the end of the day, supply in the recent weeks has really been challenged.”
On future fuel prices and whether inflation is transitory: “I think part of it is transitory because of the unique pent-up nature of demand that we saw this year. But I certainly think part of it is here to stay because of policy from the White House. That is stimulus, significant spending bills that may permanently boost inflation. Having said that, I think prices will likely stay higher than where they were prior to COVID.”
