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Gasoline Jumps Most in Month as Storm Curbs East Coast Supplies

Nov. 6 (Bloomberg) -- Gasoline rose the most in a month on speculation that East Coast fuel supplies will remain constrained after Phillips 66 said its New Jersey refinery will be shut as long as three weeks to recover from Hurricane Sandy.

Futures jumped 3 percent as Phillips’s 238,000-barrel-a-day Bayway plant, which supplies the New York Harbor market, is shut to repair equipment damaged by flooding. U.S. gasoline stockpiles probably fell 1.5 million barrels last week, according to the median estimate of 11 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 7.87 cents to settle at $2.6989 a gallon on the New York Mercantile Exchange, the biggest gain since Oct. 4. Prices have advanced 4.9 percent in two days.

Supplies in the Central Atlantic area, including New York and New Jersey, were 23.2 million barrels as of Oct. 26, 16 percent below a year earlier, Energy Department data show.

Futures touched $2.715 when the dollar weakened as U.S. voters choose today between President Barack Obama and Republican challenger Mitt Romney. The next president will face a so-called fiscal cliff of more than $600 billion in automatic tax increases and spending cuts set to take effect in 2013 unless Congress can reach a budget compromise.

The dollar sank 0.2 percent against the euro at 2:36 p.m. in New York.

Market Sentiment

“The sentiment in the market did turn and it could be the U.S. election,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research consultant in London. “After the election, the main thing people will talk about is the looming fiscal cliff and that is negative for the dollar.”

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.

Hess Corp.’s 70,000-barrel-a-day Port Reading, New Jersey, refinery, which has partial power restored, also remains shut.

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.”

Tankers Arriving

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, 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, 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

Heating oil for December delivery rose 7 cents, or 2.4 percent, to $3.0529 a gallon on the exchange. Inventories of distillates, including diesel and heating oil, declined 1.25 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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