Oil refineries along the U.S. Atlantic Seaboard braced for Hurricane Sandy on Friday, putting in place emergency plans ahead of the storm's expected landfall in the Northeast early next week.
Six East Coast oil refineries representing 1.19 million barrels per day, or 7 percent of total U.S. capacity, could potentially be hit by the deadly storm, which left 21 dead as it passed through the Caribbean and churned northward.
The threat of the storm has boosted gasoline and heating oil futures and cash product prices in the New York Harbor over the past two sessions.
Forecasters say Sandy is expected to be pulled in by another storm system moving from the west, making it come ashore in the northeast late Monday or early Tuesday and unleashing heavy rains, storm surges and possibly near hurricane-force winds.
Some forecasters say Sandy has the potential to be a multibillion-dollar disaster, wreaking greater damage than last year's Hurricane Irene, but it was too soon to tell its actual trajectory and refiners were taking early steps to prepare.
"Both our East Coast refineries have comprehensive hurricane preparedness procedures in place that they will implement based on the storm track, as they did last year for Hurricane Irene," said Michael Karlovich, a spokesman for PBF Energy.
PBF Energy owns and operates two East Coast refineries, the 190,000 barrel per day Delaware City plan and the 180,000 Paulsboro plant in Southern New Jersey, across the Delaware River from the Philadelphia area.
Hurricane Irene, which hit the region in August 2011, caused severe flooding and power outages all along the East Coast, and some refinery disruptions. Phillips 66 closed its 238,000 barrel per day Bayway refinery in Linden, New Jersey and other refiners cut back rates but the oil industry escaped Irene with minor, if any, damage.
Hess Corp. said on Friday it had implemented its storm plan for its 70,000 bpd refinery in Port Reading, New Jersey and that it would continue to watch Sandy's progress.
In addition, two other plants are potentially within the storm's path, Philadelphia Energy Solutions's 330,000 bpd Philadelphia refinery and Delta's Monroe Energy 185,000 bpd Trainer, Pennsylvania plant.
Oil markets are closely watching for any potential disruptions to gasoline and heating oil supplies, as lean fuel stockpiles of fuel in the region make the East Coast vulnerable to price spikes, especially ahead of the winter heating season.