Supply disruptions from Hurricane Sandy and the Nor’easter continue to cause supply problems along the East Coast. After the Northeast literally ran dry, the Southeast is now experiencing shortages as well. The tight supply is mainly due to the movement of product to resupply the hurricane affected areas in the Northeast, with long hauls and bulk shipments pulling product out of the Southeast over the last few days. Accordingly, terminals have reduced rack allocations in some markets in order to fulfill contract obligations. To put it into perspective, a normal carrier that makes an average of 6 deliveries in one day is currently making an average of 1 to 2 deliveries, experiencing long lines at terminals and having to drive longer than usual distances to make deliveries. As a result, logistics continue to be the name of the game in the tight markets, with multiple loads being shifted around to keep customers supplied.
Furthermore, the U.S. Maritime Administration reported 12 gasoline tankers, accounting for an estimated 1.75 million barrels, have been redirected from the Gulf Coast to the Northeast to resupply that market. As a result, the Gulf Coast is expected to experience increased tightness over the next few days.
Currently, the Georgia, Alabama, Tennessee, North Carolina and South Carolina markets are the most affected by the shortage in the Southeast, while Colonial Pipeline deliveries are currently delayed by approximately 2 to 3 days.
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