The U.S. East Coast traditionally relies on imports from east Canada and Europe to fill in its gasoline demand. However, these days the gasoline glut in the New York area is so big that traders are scheduling exports of gasoline from the New York Harbor to West Africa and Europe.
Shippers plan to export at least two million barrels of gasoline and diesel from New York and Philadelphia in the coming weeks, according to shipping data compiled by Bloomberg. UK supermajor BP and commodity trader Glencore are reportedly some of the companies sending gasoline and diesel to Europe and West Africa, since the fuel glut on the U.S. East Coast has reached its highest on record.
The overall U.S. glut of gasoline is now the worst in 27 years. At 259 million barrels, ending stocks of total gasoline in the week of February 10 were at their highest level since the EIA began tracking the data back in 1990.
On the U.S. East Coast, gasoline inventories are also breaking records. The Central Atlantic region -- the delivery point for New York Mercantile Exchange futures contracts -- saw its total gasoline stocks jump to 42.3 million barrels in the week of February 10, the highest on record and breaking the previous week’s all-time high of 40.1 million barrels. In fact, the week of February 10 broke gasoline inventory records for a third week in a row.
“Gasoline stocks on the U.S. East Coast are bloated and inventories around the New York Harbor hit a record high in early February,” energy research consultancy Energy Aspects said in a report on February 10.
Therefore, traders are looking to ship fuel from New York to Europe and Africa. Still, analysts say it’s not enough to ease the glut. According to Robert Campbell, head of oil products research for Energy Aspects, who spoke to Bloomberg last week:
“We have been exporting out of the New York Harbor, but clearly not enough, so that’s putting pressure on the products.”
Since the East Coast glut started to exacerbate a couple of months ago, there have even been tankers that had to alter their destination harbor mid-voyage and head to the Caribbean or the U.S. Gulf Coast instead of to New York as originally planned, according to Bloomberg.
The New York exports are also motivated by the unusual current cheaper gasoline in New York Harbor than in the U.S. Gulf.
“If you’re going to lift from the United States, you’re going to lift from New York Harbor,” Energy Aspects’ Campbell told Reuters a couple of weeks ago. Related: India’s Oil Demand Is Set To Break More Records
The U.S. as a whole has been exporting lately record levels of finished motor gasoline. In November 2016 – the latest available data by the EIA – the total U.S. exports of finished motor gasoline stood at 24.854 million barrels, compared to exports of 20.541 million barrels in October. The November export figure marked the highest U.S. monthly export volume since record keeping began in 1945.
Although the most recent gasoline exports from the East Coast may be due partially to an effort to ship out the winter-grade fuel, it still could be a source of concern whether U.S. demand – which has been faltering lately – could rise high enough to help clear that oversupply.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Can Canada’s ‘Gas City' Replicate Qatar’s Success?
- Biggest Gasoline Glut In 27 Years Could Crash Oil Markets
- Oil & Gas M&A Just Broke All Records
Bring down Gasoline prices.
Help the US Economy, bring down food and good prices.
Build the United States into a more powerful Union.
Nahhhh, your just going to be another CEO like Disney's Bob Iger.
Protect HIS 46+ Million a year CEO Compensation package while at the same time firing loyal American workers then outsourcing their jobs to India.
Yup, greedy people. 1 Yacht and 200 million in the bank isn't enough even at the expense of the country that gave you the opportunity that no other country would dare.
Put that in the headline so people stop wasting their time.
or better yet, get rid of the comment section if your against free speech and the 1st amendment.