Inventories of the three largest transportation fuels in the United States, motor gasoline, distillate fuel oil and jet fuel, are forecast to fall to their lowest levels since 2000 in 2026, according to the U.S. Energy Information Administration's Short-Term Energy Outlook analysis of refinery operations and fuel supply.

The key figures underline how tight the supply picture is becoming. EIA forecasts combined inventories of the three fuels will end 2026 at 375 million barrels, the lowest since 2000, when they ended the year at 358 million barrels. Two pending refinery closures, including Phillips 66's Los Angeles-area facility, will reduce U.S. production of refined products just as consumption grows.

For diesel, the fuel that powers the trucking industry, biofuel substitution is a growing factor. EIA expects biodiesel and renewable diesel to comprise about 9% of U.S. distillate fuel oil consumption, up from 5% in 2021. Even accounting for those volumes, distillate inventories and days of supply will remain low relative to historical averages.

Jet fuel faces the tightest conditions of all. U.S. jet fuel consumption is expected to hit an all-time high while inventories decline to roughly 21 days of supply, the lowest since 1963. Gasoline consumption, by contrast, is forecast to decline about 1% on improved vehicle efficiency.

EIA notes that inventory withdrawals tend to raise wholesale and retail fuel prices as buyers compete for a smaller pool of refinery production, with wider refinery margins partially offset by falling crude oil prices.

Source: U.S. Energy Information Administration -- https://www.eia.gov/todayinenergy/detail.php?id=64644