Hurricane Sandy is barreling toward to the U.S. East Coast, threatening gasoline refineries and sending gas prices upward as operations are being halted or slowed down.
Reuters reports that more than two-thirds of the East Coast’s refining capacity is shutting down in anticipation of Hurricane Sandy, bracing for potential power outages and flooding which could damage the pants.
Hurricane Sandy — now dubbed the “Frankenstorm” — has so far caused more precautionary closures than Hurricane Irene did in August 2011.
“The primary consideration would be disruption to refinery infrastructure,” said Ric Spooner, chief market analyst at CMC Markets. “That has the potential to disrupt markets and cause local and regional product shortages.”
According to CBS News, Mid-Atlantic refineries in New Jersey, Delaware City, and Pennsylvania produce 6.5 percent of the gasoline used in the U.S.
The Connecticut Post reports that Connecticut Gov. Dannel P. Malloy even asked a Hurricane Sandy task force to make sure gas stations were topped off to deal with potential supply shocks due to possible shutdowns of waterfront terminals.
“The governor asked them to have the stations topped off as late as possible so the stations would be ready to go after the storm ends,” said Andrew Doba, the governor’s spokesman.
Furthermore, the U.S. coast Guard has closed New York, New Jersey and Delaware Bay ports to vessel traffic which has halting oil tanker deliveries, which could drive prices up further.
Sandy has maximum sustained winds of 85 miles per hour, according to the National Hurricane Center, heading northwest and is set to make landfall on the New Jersey coastline. Hurricane-force winds are expected to pelt portions of the coast from Virginia to Massachusetts, which can extend outward 175 miles from the hurricane’s center.
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