Gasoline sup­ply seen down to 1990 low on Sandy

The Pak Banker - - Front Page -

NEW YORK

Gasoline stock­piles on the U.S. East Coast may sink to the low­est level since at least 1990 as Hur­ri­cane Sandy moves ashore, cur­tail­ing fuel pro­duc­tion and dis­tri­bu­tion, based on En­ergy Depart­ment data.

Re­finer­ies ac­count­ing for 94 per­cent of re­gional pro­cess­ing ca­pac­ity shut or re­duced rates be­fore Sandy, the largest trop­i­cal storm on record in the At­lantic, ap­proached the East Coast yes­ter­day. Colo­nial Pipe­line Co., which op­er­ates the largest link be­tween Gulf Coast re­fin­ers and East Coast dis­trib­u­tors, planned to shut its main line de­liv­er­ing fuel to Philadel­phia and New York Har­bor late yes­ter­day as cus­tomers shut­tered op­er­a­tions.

The av­er­age na­tion­wide price for reg­u­lar gasoline at the pump de­clined 0.5 cent to $3.543 a gal­lon Oct. 28, AAA, the largest U.S. mo­tor­ing or­ga­ni­za­tion, said on its web­site.

Prices had jumped 5.9 per­cent in three days, break­ing the long­est los­ing streak since 1986, as the storm headed di­rectly for the heart of East Coast fuel re­fin­ing and dis­tri­bu­tion. Gasoline in­ven­to­ries in the cen­tral At­lantic area are al­ready 16 per­cent be­low a year ear­lier. Sandy threat­ens to flood and dis­rupt power at re­finer­ies and ter­mi­nals that ac­count for one- third of U.S. fin­ished gasoline pro­duc­tion, ac­cord­ing to BNP Paribas SA. "Given that the hur­ri­cane is pass­ing over the re­fin­ing and ter­mi­nal sys­tem and not just near them, it's clear that sup­ply con­cerns will out­weigh con­cerns about re­duced de­mand as peo­ple stay home," Harry Tchilin­guirian, BNP Paribas SA's head of com­mod­ity mar­kets strat­egy in Lon­don, said in an in­ter­view yes­ter­day. "You're go­ing to have a run-up in prices that could be kept up."

Gasoline for Novem­ber de­liv­ery fell 1.3 per­cent to $2.7221 a gal­lon at 1:48 a.m. in elec­tronic trad­ing to­day af­ter ris­ing 5.77 cents yes­ter­day to set­tle at $2.7568 a gal­lon on the New York Mer­can­tile Ex­change, the third day of gains.

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