Bloomberg News

Gasoline Rises as Storm Aftereffects Curb East Coast Supplies

November 06, 2012

Gasoline rose on speculation that East Coast stockpiles of the motor fuel will remain constrained as Phillips 66 (PSX:US) said its New Jersey refinery will be shut as long as three weeks to recover from Hurricane Sandy.

Futures climbed a second day as Phillips’s 238,000-barrel- a-day Bayway plant, which supplies gasoline to the New York Harbor market, remains shut to repair equipment damaged by flooding. U.S. gasoline inventories probably fell 1.5 million barrels in the week ended Nov. 2, according to the median estimate of 10 analysts in a Bloomberg survey.

“Bayway produces approximately 145,000 barrels a day of gasoline, which is impacting supplies throughout the metro area,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “As we go forward, demand will pick up as terminal and service station infrastructure is restored.”

Gasoline for December delivery rose 4.33 cents, or 1.7 percent, to $2.6635 a gallon at 9:41 a.m. on the New York Mercantile Exchange. Prices have jumped 3.5 percent in two days.

Twenty-one petroleum tankers, five carrying gasoline and five transporting naphtha, are scheduled to arrive in New York Harbor in the next four days, according to the Coast Guard.

Sixty to 65 percent of gas stations are open in New York City, Michael Green, a Washington-based spokesman for AAA, said in an e-mail yesterday. The figure is 55 percent to 60 percent in New Jersey and 50 percent to 55 percent on Long Island.

Other Refineries

Valero Energy Corp. said yesterday that the fluid catalytic cracker at its 310,000-barrel-a-day refinery in Port Arthur, Texas, was shut following a Nov. 3 fire. In the Midwest, BP Plc shut the largest crude unit at its 420,000-barrel-a-day Whiting, Indiana, refinery, the biggest plant serving the Chicago market.

“People are looking past the demand destruction we’ve seen up there because of the storm,” said Phil Flynn, vice president of research at PFGBest in Chicago. “They’re looking at refinery outages and the expectation that people will start consuming gas again.”

Heating oil for December delivery rose 0.95 cent, or 0.3 percent, to $2.9924 a gallon on the exchange. Inventories of distillates, including diesel and heating oil, declined 1.63 million barrels last week, according to the survey.

The average nationwide price for regular gasoline at the pump slipped 0.7 cent to $3.463 a gallon yesterday, AAA, the largest U.S. motoring organization, said today on its website. Prices have fallen every day since Oct. 10, sliding 35.5 cents to the lowest since July 20. The pump price reached a 2012 high of $3.936 on April 4.

To contact the reporter on this story: Barbara J Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.


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