Winter storm challenges U.S. East Coast energy complex




  • In US
  • 2018-01-03 18:01:30Z
  • By By Jarrett Renshaw

By Jarrett Renshaw

NEW YORK (Reuters) - The U.S. energy industry is facing a massive test of its infrastructure as an intense winter storm roars up the Atlantic Coast, threatening power outages, refinery shutdowns and spikes in heating prices.

The storm swept up the U.S. Southeast toward New England on Wednesday, bringing snow, freezing rain and strong winds to a record-shattering cold already affecting much of the eastern United States. Temperatures are expected to keep dropping throughout the weekend, according to AccuWeather forecasts.

Prices for heating oil and natural gas in the U.S. Northeast are at their highest levels in several years on the back of near-record heating demand.

The extreme cold has stoked fears that a significant disruption could lead to a heating oil shortage, as inventories of distillate products, including heating oil, in the New England and Mid-Atlantic regions are at their lowest levels for this time of year since 2015. A number of tankers carrying diesel and heating oil from Europe are bound for the United States to address supply worries.

The U.S. Coast Guard in the key ports of Boston, the New York Harbor and Philadelphia have deployed ice-breaking ships to help keep trade traffic moving, but delays are expected.

Gasoline and diesel futures have climbed above five-year highs for this time of year, boosting key refining margins to a five-year high.

"I think we'll see a big bang and price response but I don't expect the impact and price response to be as long lasting as what you saw during Hurricane Harvey. Markets tend to over react," said John Auers, executive vice president at consultancy Turner, Mason & Co. in Dallas.

Refiners along the U.S. East Coast were bracing for difficulties in the next few days. So far, the five refineries along the East Coast are dealing with frozen pipes and other challenges, but have not experienced any significant outages, according to sources at the plants.

"We've had a lot of freeze up but haven't lost any units. This weekend will be bad," said a source at Monroe Energy's 185,000 barrel-per-day refinery outside Philadelphia.

Monroe Energy did not immediately respond to a request for comment.

Although most refineries, particularly those in northern climates, are designed to operate throughout the winter, increasingly extreme weather conditions in recent years have tested their capabilities. In 2015, more than a third of the U.S. East Coast's capacity was abruptly shut down due to glitches.

Philadelphia Energy Solutions delayed a planned shutdown of 50,000 bpd hydrotreater and a benzene unit at the Girard Point section of the Philadelphia refinery complex due to severe weather conditions, a source told Reuters Wednesday.

U.S. natural gas demand was expected to remain near record highs this week due to the frigid weather. Natural gas is the major fuel for residential and commercial heating in the U.S. Northeast and is also widely used by power plants.

Total gas consumption in the lower 48 U.S. states peaked at 141.9 billion cubic feet per day on Monday, New Year's Day, and was expected to remain near that level all week, according to Thomson Reuters analysts.

One bcfd of gas is enough to fuel about five million U.S. homes.

Natural gas prices in New England last week jumped to $53.50 per million British thermal units, highest since January 2014. The average price for gas in New England in 2017 was $3.80/mmBtu.


(Reporting By Jarrett Renshaw, Jessica Resnick-Ault and Scott DiSavino; Editing by Alistair Bell)

COMMENTS

More Related News

NFL Giants name Vikings assistant Shurmur as new coach
NFL Giants name Vikings assistant Shurmur as new coach

Minnesota Vikings offensive co-ordinator Pat Shurmur was hired as coach of the New York Giants on Monday, a day after his team was routed by Philadelphia in the NFL playoffs. Shurmur spent the past two seasons guiding the attack of the Vikings, who were one game from playing the Super Bowl in their

Brady, Gronk begin Super Bowl bye week on mend from injuries
Brady, Gronk begin Super Bowl bye week on mend from injuries

In the two-week run-up to the Super Bowl, the New England Patriots will face plenty of questions about two things critical to the team's success: Tom Brady's right hand and Rob Gronkowski's head. Brady answered most of the concerns about whether the hand injury would hinder him with a strong

Super Bowl LII: Three key match-ups between Eagles and Patriots
Super Bowl LII: Three key match-ups between Eagles and Patriots

Donovan McNabb has been replaced by Nick Foles, but Tom Brady is still Tom Brady as the Pats prepare to face the Eagles in Super Bowl LII.

They are greasing light poles with Crisco in Philadelphia to prevent Eagles fans from climbing them
They are greasing light poles with Crisco in Philadelphia to prevent Eagles fans from climbing them

Most NFL fanbases would be thrilled with the success the Philadelphia Eagles have had in the last 20 years. This season marks the 11th time in the playoffs for Philly since 2000, and on Sunday the team will play in its sixth NFC Championship in that time span, one of which they converted into a Super Bowl appearance against the New England Patriots in 2004. In Philly, two Super Bowl losses in franchise history just isn't going to cut it, and no amount of NFC Championship wins or losses will ease the pain until they get that breakthrough ring.

In Pennsylvania, women who voted for Trump voice support after first year
In Pennsylvania, women who voted for Trump voice support after first year
  • US
  • 2018-01-20 11:13:27Z

"My 401(k) and my 403 have soared, and if anybody doesn't realize that, they've been asleep for a year," said Miller, a 50-year-old emergency room nurse from Audubon, Pennsylvania, referring to her retirement accounts' growth in a booming stock market. The Philadelphia suburb where Miller lives in Montgomery County was key to Trump's surprising 2016 triumph. Many of them were unfazed by Trump's combative style and provocative language.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: US

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.