Rockies become diesel bright spot between West and East coasts

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.