You are here
US refineries scale back as storm moves in; oil falls
The biggest refineries in the Northeast shut down or throttled back on Monday in advance of Hurricane Sandy, and oil prices fell sharply as it appeared the massive storm will reduce demand. Phillips 66 shut down its Linden, New Jersey refinery, the second-biggest in the Northeast at 285,000 barrels per day. The biggest refinery in the area, Philadelphia Energy Solutions, was nearly shut. Most other big refineries in the Northeast were running at reduced capacity.
Sandy is powerful enough to down trees and powerlines and cause widespread flooding. Businesses could also be shut for days. If so, demand for gasoline and other oil products would drop sharply.
The power outages and the shutdown of major cities “may take a toll on demand unlike anything we have seen before,” wrote Phil Flynn, a senior market analyst for Price Futures Group, in a report on Monday. “The impact on demand may not last for hours but more than likely for days,” he wrote.
Tom Kloza, chief oil analyst at Oil Price Information Services, said he expects the drop in demand for oil and refined products “will be about as significant as we’ve seen since Katrina made landfall” in 2005. Crude oil prices fell US$1, or 1.1 per cent, to US$85.32 a barrel in trading on the Nymex.
User comments posted on this website are the sole views and opinions of the comment writer and are not representative of Guardian Media Limited or its staff. Guardian Media Limited accepts no liability and will not be held accountable for user comments.
Please help us keep out site clean from inappropriate comments by using the flag option.
Guardian Media Limited reserves the right to remove, to edit or to censor any comments. Any content which is considered unsuitable, unlawful or offensive, includes personal details, advertises or promotes products, services or websites or repeats previous comments will be removed.