Energy traders watch refineries, nuclear power plants on East Coast

The Aftermath

As far as the refineries in the Northeast, we will be waiting to hear about damage reports and then the next question will be when the power can get back on. Reuters is reporting U.S. refinery and pipeline companies that nearly halted East Coast fuel supplies ahead of Hurricane Sandy will begin assessing the storm's damage on Tuesday, hoping that their flood defenses and on-site power will allow a quick return to service. Three of the area's six key refineries — including the two largest — effectively shut down operations in advance of landfall Monday evening for the Atlantic storm. Two more reduced operating rates, curtailing at least two-thirds of the region's capacity.

Major ports that supply the area with some 1 million barrels per day (bpd) of imported fuel were also shut, while the northern leg of the Colonial Pipeline from the Gulf Coast was idled. It supplies as much as 15 percent of the East Coast's 5.2 million bpd of gasoline, diesel and fuel demand.

As Sandy's up to 90 mile per hour winds slow over land and its 13-foot storm surge subsides, operators such as Phillips 66 and PBF Energy will assess any damage to their facilities, and will start making plans for restoring operations — a delicate process in the best of times.

If damage is limited, many experts say fuel supplies should resume within a few days, potentially reversing the three-day, 6% rally in benchmark New York harbor gasoline futures as traders shift their focus from the threat of a supply squeeze to the loss of demand from airport and road closures.

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About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.


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