July 1 (Bloomberg) -- Supplies of diesel, the fuel that powers heavy trucks used to move goods across the U.S., rose to the highest in at least 16 years this month, as manufacturing inventories climbed, signaling a need for fewer deliveries. The CHART OF THE DAY shows U.S. diesel stockpiles rose 28 percent in the past six months, tracking an increase in the ratio of manufacturers’ inventories to sales.
“Inventories are bloated,” said Tavio Headley, an economist with the American Trucking Associations in Arlington, Virginia. “Businesses are not taking many new deliveries, and that has a huge effect on tonnage volumes. The significant drop in tonnage volumes is also having a huge impact on domestic diesel demand.”
Diesel supplies rose 2.18 million barrels, or 2 percent, to 111.6 million barrels in the week ended June 19, according to the Energy Department. That’s the highest level in data going back to 1993. Manufacturers’ inventory-to-sales ratio rose to 1.45 in April from 1.21 in July 2008, according to the U.S. Census Bureau.
The ATA’s For-Hire Truck Tonnage Index contracted 11 percent in May from a year earlier. That’s a “historically large” decline, according to a report last week from the group, the largest U.S. trade association for the trucking industry.
Diesel fuel for delivery at New York Harbor fell 56 percent in the year ending in May, to $1.6857 a gallon, according to data compiled by Bloomberg. It rose 0.54 cent, or 0.3 percent, yesterday to $1.8352 a gallon.