Hurricane Matthew May Delay Fuel Cargoes to U.S. East Coast

Updated on
  • Florida fuel distributors well supplied, Governor Scott says
  • Matthew downgraded to Category 3 hurricane but may strengthen

Hurricane Matthew's Troubling Path for Oil Market

Hurricane Matthew may delay petroleum cargoes to the U.S. East Coast by four days as ships stay in port while the storm passes.

Matthew, which hit Haiti and Cuba on Tuesday with winds of 145 miles (230 kilometers) per hour, is forecast to head for the U.S. and hug Florida’s Atlantic coast on Thursday and Friday, according to the U.S. National Hurricane Center in Miami. Tropical storm or hurricane conditions could affect Georgia and the Carolinas later this week or this weekend. 

“The New York Harbor market as well as markets along the southeast of the U.S. regularly receive foreign products cargoes,” Andy Lipow, president of Lipow Oil Associates, a Houston-based consulting company, said in a telephone interview. The disruption comes at a time when inventories are high and able to absorb a supply disruption, said John Mayes, an analyst at Dallas-based consulting company Turner Mason & Co.

The U.S. Coast Guard will ban vessel movement into affected ports when gale-force winds of more than 39 mph are expected, the agency said in a statement Tuesday. The storm could delay traffic by three or four days, Lipow said. Mayes predicted one or two days.

Florida Watch

Matthew, now classed as a Category 3 hurricane on the five-step Saffir-Simpson scale, has triggered hurricane warnings from Golden Beach to Sebastian Inlet and Lake Okeechobee, while the hurricane watch along Florida’s east coast has been extended northward to Fernandina Beach, according to an advisory at 5 a.m. New York time Wednesday. Maximum sustained winds have dropped to about 125 miles per hour.

Gasoline futures for November delivery into New York Harbor extended gains Wednesday, rising as much as 0.7 percent to $1.5102 a gallon on the New York Mercantile Exchange. Prices climbed 2 percent to settle at $1.4996 on Tuesday.

Fuel-distribution companies in Florida are well-supplied ahead of the storm, with no reported shortages as of Tuesday, Governor Rick Scott said in a statement. But Florida’s Atlantic Coast ports in the path of Matthew are crucial to supplying the state, Dave Mica, executive director of the Florida Petroleum Council, said by phone from Tallahassee.

“We’re getting into that period where you know waterborne craft are not going to be able to reach some of these ports,” he said. If Miami, Fort Lauderdale and Jacksonville are shut in by the storm, then Tampa, a port on the Gulf Coast which has a pipeline to central Florida, could be a good way to get fuel into the state, he said.

Matthew struck southwestern Haiti early Tuesday, uprooting trees and tearing roofs from homes. It’s now moving north at about 10 miles per hour and will traverse the Bahamas through Thursday, nearing the east coast of Florida by evening, the advisory shows. A “slight strengthening” is forecast in the next couple of days. The hurricane is also threatening to shut in about 33 million barrels of oil storage in the Bahamas.

— With assistance by Brian K Sullivan

(Updates hurricane strength in fifth paragraph.)
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