Diesel Supplies May Tighten in Northeast, DOE Says
Diesel supplies could be tight for a year or more in the Northeast because of refinery shutdowns and transportation constraints, according to a Department of Energy report released this week.
Ultra-low-sulfur diesel will be “the most challenging product to replace as there are few alternative supply sources outside of the U.S. Gulf Coast,” DOE said in a report released Monday.
The Northeast also will see its consumption of ULSD increase by 20% on average because of stricter requirements for heating oil sulfur content that start in July in New York, Bloomberg reported, citing DOE.
Infrastructure changes will be necessary to accommodate the changing product flow as the need for imports into the East Coast increases, the report said.
Diesel jumped more than 9 cents this week to more than $4 a gallon, the first time it has topped $4 in the month of February, according to DOE records.
Oil companies may delay making significant investments in new logistical arrangements until they know the status of Sunoco Inc.’s Philadelphia-area refinery, Bloomberg said.
Sunoco and ConocoPhillips have idled two Pennsylvania refineries and Sunoco plans to shut its Philadelphia plant by June if it can’t find a buyer. The three refineries together represent about 50% of total East Coast refining capacity, Bloomberg reported.
The closure of the Philadelphia plant may leave the East Coast short 240,000 barrels a day of gasoline next year, DOE said. The combination of the plant shutdown and tighter regulations will curtail diesel supply by 180,000 barrels daily, DOE said.
