29 October 2012 15:35 [Source: ICIS news]
HOUSTON (ICIS)--US gasoline futures spiked by nearly 10 cents/gal in morning electronic trading on Monday, as Hurricane Sandy tightened an already thin supply situation.
Futures were at $2.7936/gal, up 9.45 cents from the previous close, during the mid morning.
Gasoline stocks in the east coast were at 48.1m bbl for the week ending 19 October, down 9.1% from the same period a year ago, according to the US Energy Information Administration (EIA).
Energy analyst Phil Flynn said the storm will likely shut down 6.5% of US refining capacity on the east coast. Phillips 66, Hess and Philadelphia Energy Solutions have already announced shutdowns and production curtailments.
"The shutdown of major cities and the expected power outages may take a toll on demand unlike anything we have seen before," he said. "The impact on demand may not last for hours but more than likely for days. This could be the biggest demand destruction event in history."
The east coast is the biggest consumer of gasoline at around 3.1m bbl/day, according to the EIA. The midwest is the second largest consumer at 2.5m bbl/day.
Traditionally, the east coast has produced only about 40% of the gasoline it consumes, while the rest is supplied through pipelines from the US Gulf coast and imported from Europe.
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