DALLAS - Gasoline rose on speculation that East Coast stockpiles of the motor fuel will remain constrained as Phillips 66 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 3.98 cents, or 1.5 percent, to $2.66 a gallon at 11:13 a.m. on the New York Mercantile Exchange. Prices have jumped 3.4 percent in two days.
Hess Corp.’s 70,000-barrel-a-day Port Reading, New Jersey, refinery, which has partial power restored, also remains shut.
Refineries accounting for 94 percent of regional processing capacity shut or reduced rates before Sandy, the largest tropical storm on record in the Atlantic, made landfall Oct. 29 in New Jersey. Pipelines, terminals, ports and gas stations also were shuttered before the storm.
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.
“Demand destruction was immediate,” said Stephen Schork, president of the Schork Group Inc., an energy advisory company in Villanova, Pennsylvania. “Now, demand that was masked because of the immediate aftermath is unmasked.”
Terminals will be able to receive cargoes as they reopen. Twenty-one petroleum tankers, including 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. That’s up from 15 yesterday.
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, Ind., 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, senior market analyst at Price Futures Group in Chicago. “They’re looking at refinery outages and the expectation that people will start consuming gas again.”
Heating oil for December delivery rose 1.49 cents, or 0.5 percent, to $2.9978 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.
Join PBN and two panels of successful female executives, business owners and entrepreneurs as we delve into what women should do to advance their careers, and become leaders in the corporate world and their own enterprises.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.