Besides knocking down power lines and causing countless blackouts up and down the east coast, Hurricane Sandy may also have a bigger impact on the energy industry, hitting you were it hurts most: your wallet.
Hurricane Sandy and the Oil Industry
According to IHS Global Insight, supply chain managers in the Northeast are expected to see a shortage of refined oil products after Sandy forced 70% of the East Coast’s oil refineries to shut down. And while many refineries have returned to full capacity, several refineries throughout New Jersey and New York, including the product trading hub in New York Harbor, remain out of operation.
More importantly, the closing of the hub in New York Harbor has severely affected the oil supply line. The entire Northeast relies not only on oil products from the region, but also products imported from the Gulf Coast and elsewhere. Demand in the Northeast is approximately 2.2 million barrels per day: 42% from local refineries, 31% from other regions (mainly the Gulf Coast), and 27% from net imports.
For this reason, 24% of all New York gas stations are still without gas.
Crude Oil Prices Rise
Crude oil prices rose today for the second straight day in the market after gasoline supplies fell 1.5 million barrels to 198 million. Crude oil advanced as much as 1.4% to $2.6571 a gallon.
“The devastation and fuel shortages brought on by Hurricane Sandy are still being felt across the product complex in the U.S.,” said Andrey Kryuchenkov, a London-based analyst at VTB Capital.
Hurricane Sandy and the Electric Industry
Following Hurricane Sandy, outages remain a major problem, especially in New Jersey, where 14% of people (569, 822) are still without power. Meanwhile, 355,055 are without power in New York; 9,797 in Pennsylvania; and 2,113 in Maryland. And while these numbers may seem high, consider that when the hurricane first hit, 8,511,251 were left without power. Since then, power has been restored for 7,357,492 individuals.
Click Here for the up-to-date Hurricane Sandy Situation Report from the United States Department of Energy.
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