(Adds terminal closures, graphic)
By Devika Krishna Kumar
NEW YORK Oct 6 The Southeast United States is
expected to be hit with fuel shortages in the aftermath of
Hurricane Matthew, as the storm barrels toward one of the
largest energy-consuming regions in the country.
Some states are already experiencing supply constraints as
motorists fill up tanks as an emergency precaution. The region
is not known for energy production, but there are significant
storage facilities directly in the path of the storm that have
already been evacuated.
Roads in Florida, Georgia, North Carolina and South Carolina
were jammed on Thursday, while gas stations and food stores ran
out of supplies as the Category 4 hurricane, which could be the
deadliest storm in decades, approached.
The hurricane strengthened as it headed toward the
Southeastern United States on Thursday after killing at least
140 people, mostly in Haiti, on its northward march.
About 10 million barrels of refined products storage lie in
the path of the storm, and these storage facilities could suffer
"significant damage," said Ernie Barsamian, CEO of the Tank
Tiger, a storage consultancy.
Vitol's storage subsidiary VTTI said its Seaport
Canaveral Florida storage terminal, located in Cape Canaveral,
was evacuated and would remain shut until it is safe to restart.
The VTTI terminal has a capacity of 3 million barrels, and
stores gasoline, diesel, jet fuel and kerosene, among other
Three Kinder Morgan terminals in South Carolina were
closed as of Thursday morning, along with two Florida terminals.
The Shipyard River South Terminal, however, also in South
Carolina, is open until further notice, the company said via
All terminals on the East Coast of Florida have been
shuttered, said Ned Bowman, executive director of the Florida
Petroleum Marketers Association.
"Only one that's open right now is Tampa, but if the winds
get too big the Coast Guard will close it," he said.
If the terminals sustain damage, gasoline would need to be
trucked from other markets, up to 12 hours away, Barsamian said.
PUMP PRICES INCH UP
Retail gasoline prices in Florida, Georgia, North Carolina
and South Carolina edged up slightly on Thursday, according to
motorist advocacy group AAA. Prices in Florida climbed to an
average of $2.185 per gallon from $2.165 on Wednesday.
But panic buying could lead to fuel shortages and higher
pump prices, analysts said, as consumers anticipate power
outages that could affect gas stations.
All major ports in the Florida region are shut. The state
does not have any crude oil refineries and relies on products
delivered by tanker and barge to Florida marine terminals.
If Florida, North Carolina, South Carolina and Georgia are
hard hit by the storm, some stations could face challenges in
getting fuel to motorists, said Patrick DeHaan, petroleum
analyst at Gasbuddy.
Other than Florida, those states are still reeling from
Colonial Pipeline Co's biggest gasoline spill in
nearly two decades, which was discovered in Alabama last month.
The outage in the pipeline, which connects the refining hub on
the Gulf Coast to the East Coast, squeezed supplies and led to
higher prices in the Southeast.
Colonial, which runs inland, said it did not anticipate any
power disruptions based on the hurricane's current trajectory
and is monitoring the situation.
The Georgia Ports Authority said on Thursday it would close
operations ahead of the hurricane and that vessel activity is
expected to resume on Sunday.
Some terminals in the Caribbean, including BORCO terminal
and Statoil's South Riding Point terminal, both in the Bahamas,
have been shut since Tuesday.
On the U.S. East Coast, the effect of the hurricane is
expected to be mixed. Matt Smith, director of commodity research
at energy data provider ClipperData, said the storm's trajectory
could result in cargoes being redirected to fill the supply loss
in the U.S. Southeast after the storm.
U.S. gasoline futures have been choppy in the last
two sessions, as traders say the hurricane will soften demand.
While the effect on futures prices from the hurricane is
expected to be limited, cash prices in some markets, already
affected by refinery maintenance season, could strengthen.
(Reporting by Devika Krishna Kumar in New York; Additional
reporting by Jessica Resnick-Ault and Jarrett Renshaw in New
York, Liz Hampton in Houston, Zachary Fagenson in Miami and
Scott Malone in Boston; Editing by Matthew Lewis)