Sandbags surround the New York Stock Exchange in preparation for Hurricane… (Peter Foley / Bloomberg )
The storm-related shutdown of an important New Jersey refinery and cutbacks on production runs at other refineries along the Delaware River may kick up East Coast gasoline prices at the pump later this week, but analysts were predicting that any price jump would probably be short-lived.
Phillips 66 said that it has closed its 240,000-barrel-a-day Bayway refinery in Linden, N.J., because of the possibility of storm surges from Hurrican Sandy.
Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey, said that buyers were reacting to that news by scrambling for supplies. That in turn was raising prices for so-called RBOB gasoline futures on the New York Mercantile Exchange.
The futures prices briefly rose by about 10 cents early Monday, but had already begun to fall a bit by mid-morning, dropping the increase to about 6.5 cents, to $2.7641 a gallon, Kloza said.
"The Phillips 66 refinery is perhaps the most threatened facility," Kloza said, "Other refineries along the Delaware River are cutting back production runs, the way one might take the temperature down on water being boiled for pasta."
Kloza said that meant that the refineries could return to full production quickly, provided they escape flooding or other storm damage.
Other analysts said it was too soon to tell how prices might be affected, having nothing similar from the past to refer to for comparison with Hurricane Sandy.
"For motorists west of the Mississippi, there may be little change in prices because of the storm," said Patrick DeHaan, senior energy analyst for GasBuddy.com, "but as you head east, especially in the states likely to be highly impacted, there may be disruptions at various levels."
Kloza and DeHaan said separately that any fuel-supply disruptions would be mitigated by the fact that demand would be down because far fewer people are out driving during the storm.
Today, the national average for a gallon of regular gasoline is $3.543, a decline of 12.2 cents since last week. A primary factor in driving the nation's average down was a big one-week drop in prices in California.
California's average price for a gallon of gasoline is down 26.3 cents since last week, to $4.164, as prices continue to fall there following a recent state record of $4.671 a gallon for regular gasoline set on Oct. 9.
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