Rockies Become Diesel Bright Spot Between West and East Coasts

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The boost truck fuel demand is getting from booming consumer goods imports into California is spreading to the Rocky Mountains as the freight heads to the East Coast.

In a sign that another bright spot for diesel is emerging with the surge in U.S. online shopping, Magellan Midstream Partners LP is expanding a truck loading terminal in Wyoming to serve rising freight traffic on Interstate 80.

While the Covid-era trend to buy Asian goods from the laptop rather than drive to a store is bad news for local businesses, it’s been a boon for diesel. Freight is booming at a time when refineries are closing because of the devastating impact lockdowns had on gasoline demand.

Capacity at the 300,000-barrel Cheyenne terminal drawing fuel from Rocky Mountains refineries will be expanded 50% by mid-2021, Magellan said in an emailed statement Wednesday.

Freight moving east from the port at Oakland, California, and a distribution center at Stockton, California, have boosted diesel demand along the interstate, which links California and New Jersey, said Kyle Lintner, managing director of freight consultant K-Ratio.

“Magellan might be trying to capitalize on all of the eastbound trucks.” he said.

West Coast diesel stocks last week were at a seasonal 14-year low with trucking demand keeping a lid on stockpiles, Energy Information Administration data showed.

©2020 Bloomberg L.P.

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