East Coast Gasoline Jumps on Jones Act Waiver Expiration
Gasoline advanced for the first time in three days in New York Harbor as the waiver of shipping regulations following Hurricane Sandy approaches an end even as supplies in the region are at a four-year low.
Under the 1920 Jones Act, ships carrying cargo between U.S. ports must be U.S.-built, flagged and crewed. On Nov. 2, Secretary of Homeland Security Janet Napolitano issued a waiver of the act, which allowed foreign-flagged ships to load fuel on the U.S. Gulf Coast through Nov. 13 and deliver them to the U.S. East Coast by Nov. 20.
Stockpiles of motor fuel on the East Coast fell by 1.54 million barrels to 45.1 million in the week ended Nov. 9, the Energy Department reported yesterday. That’s the third consecutive weekly decline and the lowest level since Sept. 26, 2008.
Reformulated, 84-octane gasoline in the New York Harbor gained 2 cents to trade at a premium of 17 cents a gallon over futures on the New York Mercantile Exchange at 3:23 p.m. Prompt delivery of the fuel advanced 3.39 cents to $2.8801 a gallon.
Ships are delivering 1.75 million barrels of gasoline and blendstocks to the Northeast under the waiver, according to data compiled by the U.S. Transportation Department’s Maritime Administration.
Phillips 66’s 238,000-barrel-a-day Bayway refinery, which is the largest single site in the New York Harbor area, is shut after being taken offline Oct. 29 when Hurricane Sandy left the plant flooded and without power in New Jersey. Phillips said Nov. 5 that it planned to resume normal operations in two to three weeks.
Hess Corp.’s Port Reading unit, with a capacity of 70,000 barrels-a-day and also located in New Jersey, resumed operations this week and plans to return to full rates by early next week, the company said today.
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