Gasoline supply seen down to 1990 low on Sandy
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.