New York gasoline strengthened on speculation fuel supplies on the U.S. East Coast will tighten as two New Jersey refineries remain shut and distribution terminals work to restart following Hurricane Sandy.
Phillips 66’s Bayway refinery and Hess Corp.’s Port Reading facility aren’t running a week after Hurricane Sandy left the units flooded and without power. Crews are making repairs after restoring power to Bayway, while Port Reading has partial power, the companies said. The units make up a combined capacity of 308,000 barrels a day.
Reformulated gasoline in the New York Harbor traded at a premium of 20.25 cents a gallon over December futures on the New York Mercantile Exchange at 2:05 p.m., according to data compiled by Bloomberg. That compares with 4.25 cents over the November contract Oct. 29 before the storm hit. November expired Oct. 31 at a 13.15-cent premium to December.
“Until we get a real definitive statement about the refineries coming up after Hurricane Sandy, we’re seeing strength in the market,” Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut, said by phone today. “There are worries about how the supply issue is going to play out.”
Stockpiles of motor fuel on the U.S. East Coast dropped by 202,000 barrels to 47.9 million in the week ended Oct. 26, the Energy Department reported last week. That’s the first decline in three weeks and the lowest since the week ended Oct. 12.
Kinder Morgan Energy Partners LP started up limited inbound and outbound operations at its Carteret and Perth Amboy terminals in New Jersey, while Phillips 66 resumed sales to wholesale customers on a limited basis from the Linden terminal on Nov. 2, the companies reported.
Ultra-low-sulfur diesel in New York gained 1.87 cents to 16 cents a gallon above heating oil futures, the highest level in Bloomberg data since October 2008.