New York Fuels Gain on Potential Storm Impact to Refiners

New York Harbor fuels strengthened versus futures on speculation a winter storm on the U.S. East Coast may slow refinery and terminal operations, and increase demand for distillates.

The winter storm, which has caused at least 4,000 U.S. flights to be canceled, may leave thousands without power and will probably drop snow by the foot across the Northeast, according to the National Weather Service and Blizzard warnings stretched from Maine to New Jersey, and winter storm advisories reached south to Virginia and west to Michigan.

“There’s concern that the storm might impact refinery operations in the Northeast,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Reformulated, 84-octane gasoline, or RBOB, in the New York Harbor, strengthened 0.25 cent to 4 cents a gallon below futures on the New York Mercantile Exchange at 2:25 p.m. Ultra-low-sulfur diesel in the region advanced 0.25 cent to trade at a premium of 6.63 cents versus heating oil futures.

New Jersey refineries including Phillips 66’s 238,000-barrel-a-day Bayway refinery and Hess Corp.’s 70,000-barrel-a-day Port Reading plant are monitoring storm conditions, the companies said today. No restrictions on traffic have been put on ports in New Jersey or New York, according to the Coast Guard.

Supplies of the motor fuel in the Central Atlantic region including the New York Harbor rose to 32.4 million last week, while distillate stockpiles slipped to 23.5 million, the Energy Information Administration reported. Distillates include diesel fuel and heating oil.

Refinery Margins

The 3-2-1 crack spread in New York, based on Brent oil in Europe, rose $1.1324 to $12.4174 a barrel. The 3-2-1 spread on the U.S. Gulf Coast, measured using West Texas Intermediate in Cushing, Oklahoma, gained $2.697 to $30.477 a barrel, while the same spread for Light Louisiana Sweet oil increased $1.3297 to $8.7924 a barrel.

Conventional, 87-octane gasoline on the Gulf strengthened 1.75 cents to 15.5 cents below futures. Ultra-low sulfur diesel in the region advanced 0.12 cent to 2.5 cents above heating oil futures.

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