Tropical storm Isaias is threatening critical oil infrastructure along the U.S. East Coast as it barrels towards the Northeast, Bloomberg reports, noting that the risk has pushed up regional prices of various fuels.
The Coast Guard has limited the traffic in Delaware Bay, which contains infrastructure serving three refineries, which, in turn, serve drivers and airports along the Atlantic seaboard. The combined capacity of the refineries is 530,000 bpd. The region’s largest oil port is also risking at least partial closure as the storm draws near.
As a result of the disruption, the New York Harbor physical gasoline benchmark jumped to their highest relative to Nymex gasoline futures since November, to close to $0.03 per gallon.
Isaias made landfall in North Carolina as a hurricane and has been moving up the East Coast, bringing tornadoes and torrential rains that have caused floods along its path. The storm is currently moving towards Canada.
Experts warned earlier this year that the Atlantic hurricane season would be a busy one, with more than the average number of storms. Normally, there 12 named ones during a hurricane season, but for this year, meteorologists expect anywhere from 13 to 19.
“Things are unfortunately shaping up to be an active hurricane season in the Atlantic, which is probably not what people are wanting to hear,” one such expert, Phil Klotzbach from Colorado State University, told National Geographic in July.
Even earlier in the year, the National Oceanic and Atmospheric Administration predicted above-normal activity during the 2020 hurricane season, with between 6 and 10 hurricanes, of which 3 to 6 could become major ones.
The weather conditions conducive to an above-normal hurricane season included the absence of El Nino, which would have suppressed hurricane activity, warmer than usual seas surface temperatures in the tropical Atlantic Ocean and the Caribbean, and weaker winds.
By Charles Kennedy for Oilprice.com
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