By Barbara J. Powell and Brian K. Sullivan, Bloomberg
Hurricanes sometimes don’t even need to make landfall to affect U.S. refineries.
At least two U.S. East Coast refineries are making less gasoline and diesel as rough Atlantic seas hamper transfer of crude from ships to barges for delivery to the refineries, people familiar with operations say. Philadelphia Energy Solutions Inc., which operates the largest oil-refining complex serving the New York Harbor market, cut rates about 20 percent. Delta Airlines Inc.-subsidiary Monroe Trainer is processing 30 percent less crude.
Gasoline for October delivery on the Nymex was up as much a 2.9 percent Monday while diesel futures jumped as much as 1.9 percent.
“Product prices are rallying in response to refinery run cuts on the East Coast, which will result in lower product availability in the short term,” Andy Lipow, president of Lipow Oil Associates LLC in Houston said in a phone interview Monday.
Philadelphia Energy also ordered as many as eight train loads of Bakken crude from North Dakota to supplement crude quickly at its 335,000 barrel-a-day refinery. Delta’s Monroe Trainer was forced to cut rates after running above its 185,000 barrel-a-day nameplate capacity last week.
Trainer spokesman Adam Gattuso couldn’t comment on daily operations, he said in an email Monday. Philadelphia Energy doesn’t comment on day-to-day operations or its commercial activities, spokeswoman Cherice Corley said in an email.
A small craft advisory stretches from Massachusetts to the North Carolina-Virginia border, where it is replaced by tropical storm warnings, the National Weather Service said. At the mouth of Delaware Bay, waves were forecast to build Monday and Tuesday, peaking at about 10 to 11 feet on Wednesday as Hurricane Maria moves north.
The storm, which devastated Puerto Rico last week, is forecast to graze the North Carolina coast before turning east in the Atlantic. It will create rough seas along the East Coast as it passes.
Waves are just over three feet at the mouth of Delaware Bay, according to National Data Buoy Center website. Over the weekend, waves at the buoy, about 30 miles from Cape May, New Jersey had reached 5.2 feet.
Texas refineries, including Exxon Mobil Beaumont and Total Port Arthur are trying to restore normal operations after Harvey’s Aug. 25 landfall on the middle Texas Gulf Coast knocked out almost one-quarter of U.S. refining capacity.
“Contributing to the price rally is the fact that Texas Gulf Coast refineries haven’t fully restored operations since Hurricane Harvey,” Lipow said.
