Earlier this week, Hurricane Sandy hit the U.S. Northeast, an area that is home to some of the United States’ critical petroleum refining and transportation infrastructure and is a major consumer of petroleum products. Areas along the lower Delaware River, home to most of the region’s refining infrastructure and some major terminals suffered some precautionary and transitory impacts but have returned or are quickly returning to full capability. Some of the most severe damage from the storm occurred in the New York and New Jersey areas, including the product trading hub in New York Harbor.
As of this writing, the two refineries in the New York Harbor area, which have a combined capacity of roughly 300,000 barrels per day (bbl/d), remain out of operation. Notwithstanding this refining capability, the New York Harbor region and areas supplied from it rely heavily on product moving to the area via pipeline from the Gulf Coast, home to about half of total U.S. refining capacity, and on product imports. For example, daily product deliveries to the region via pipeline from the U.S. Gulf Coast are roughly double the combined capacity of the two local refineries. Product imports, especially gasoline, also play a significant role in supplying the region. All of the pipeline, import, and local refinery supplies move through petroleum terminals and distribution infrastructure in New York Harbor. Flooding and power outages at terminals and other distribution infrastructure continue to be the biggest hurdle in returning supply chains to normal. For example, the flow of product into the New York area via pipeline from the Gulf Coast depends on the ability to move product into and through major terminals.
While consumption of petroleum products temporarily declined in the Northeast during Hurricane Sandy, markets continue to require products from outside the region to meet demand. Consumption of gasoline and distillates (diesel and heating oil) in the entire Northeast is about 2.2 million bbl/d. About 42 percent comes from local refineries, 31 percent comes from other regions (mainly the Gulf Coast), and 27 percent from net imports, most of which are gasoline. However, as noted above, the New York metropolitan area and the New England area supplied from New York Harbor are more reliant on product originating outside the region than other parts of the Northeast.
Damage assessment of the petroleum infrastructure on the East Coast is ongoing. Updated situation reports on East Coast energy infrastructure are available from the U.S. Department of Energy.
Gasoline prices fall for third straight week, diesel fuel for second
The U.S. average retail price of regular gasoline decreased 12 cents last week to $3.57 per gallon, the lowest national average price since July 30, but 12 cents per gallon higher than last year at this time. Prices fell in all regions of the Nation for the second consecutive week, with the largest decrease on the West Coast, where the price is down 20 cents to $4.05 per gallon. The West Coast price has decreased 35 cents per gallon over the last two weeks. The East Coast and Gulf Coast prices both fell 11 cents, to $3.59 per gallon and $3.34 per gallon, respectively. Down a dime from last week, the Midwest price is now $3.39 per gallon. Rounding out the regions, the Rocky Mountain price is $3.65 per gallon, a decrease of six cents from last week.
The national average diesel fuel price decreased nine cents to $4.03 per gallon, 14 cents per gallon higher than last year at this time. The diesel price fell in all regions of the Nation for the second consecutive week, with the largest decrease coming in the Midwest, where the price fell 12 cents to $3.98 per gallon. The last time the Midwest diesel price was below the $4-per-gallon mark was August 13, 2012. The Gulf Coast price is $3.95 per gallon, a decrease of a nickel from last week. Decreasing seven cents from last week, the East Coast price is now $4.04 per gallon. The West Coast price dropped 11 cents to $4.19 per gallon, while the Rocky Mountain price is $4.20, a decrease of five cents from last week.
Propane stocks experience another decline
Last week, total U.S. inventories of propane declined by 0.5 million barrels to end at 73.9 million barrels, 13.7 million barrels (23 percent) higher than a year ago, as winter heating season begins to ramp up. Most of the draw occurred in the East Coast region, which fell 0.6 million barrels. Elsewhere, the Midwest and Rocky Mountain/West Coast regions drew slightly. The Gulf Coast region added 0.1 million barrels of new propane stocks. Propylene non-fuel-use inventories represented 5.6 percent of total propane inventories.
Residential heating oil prices decrease, propane unchanged
Residential heating oil prices decreased during the period ending October 29, 2012. The average residential heating oil price fell by almost 4 cents per gallon last week to $3.99 per gallon, 14 cents per gallon higher than the same time last year. Wholesale heating oil prices decreased by nearly 2 cents per gallon last week to reach $3.23 per gallon, 7 cents per gallon more than last year at this time.
The average residential propane price remained relatively flat last week, holding at $2.38 per gallon, 43 cents per gallon lower than the same period last year. Wholesale propane prices increased by 2 cents to $1.02 per gallon for the week ending October 29, 2012, nearly 49 cents per gallon below the October 31, 2011 price.
Please be aware that there may be a higher number of revisions to this week’s residential heating oil and propane prices than usual due to the number of states affected by Hurricane Sandy. These revisions will be published when data are released next Wednesday, November 7.