EIA – Reductions in Northeast Refining Activity: Potential Implications for Petroleum Product Markets

by Sabrina I. Pacifici on December 27, 2011

Reductions in Northeast Refining Activity: Potential Implications for Petroleum Product Markets, December 2011

  • “Reduction in refining activity in the Northeast, as reflected in recently announced plans to idle over 50% of the regional refining capacity, is likely to impact supplies of petroleum products. The transition period as supply sources shift could be problematic for Ultra-Low Sulfur Diesel (ULSD), gasoline, and jet fuel supplies. Prolonged uncertainty over the coming months with regard to the disposition and operation of important logistical assets such as pipelines, ports and storage would compound adjustment challenges. Reduced short-term product supply flexibility due to longer delivery times and potential transportation bottlenecks for sources outside the region could also increase price volatility. Finally, an increase in demand for ULSD due to changing State requirements could further exacerbate supply issues.”
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