Assessing Hurricane Dorian scenarios for oil & gasoline

Gasoline and diesel markets appear to be in good shape in advance of Hurricane Dorian reaching Florida shores the next few days. DTN will monitor daily terminal volumes and prices once Dorian arrives and moves out.

The United States, including Florida and the lower Atlantic states, are well supplied. Barring a catastrophic landfall, there should be minimal price spiking and nominal depletion of terminal and retail station inventory.

Once the storm exits, I expect gasoline and diesel logistics to return to normal relatively quickly.

The current landscape shows that lower Atlantic distillate stocks rank slightly below normal for a five-year average but declining. East Coast refinery runs sit near their lowest level of the year at a 66.9 percent utilization rate.

Early storm projections for northern Florida, including Orlando and Jacksonville:

• Gasoline terminal volume has been declining since March even with wt average rack price at lowest level of the year.
• ULSD terminal volume declining since March even with wt average rack price at lowest level of the year.

Depending on the severity of the hurricane – expected to become a significant hurricane – Dorian could have the following exposure:

• Terminal shutdowns.
• Retail shutdown closures.
• Price spikes driven from the rack level.
• New York Mercantile Exchange would align with those changes.
• Commercial sector demand should recover quickly.
• Retail gasoline demand would be slower to recover.
• Product flow to Florida from the Gulf and international could be impacted.

 

Actions by Florida Gov. Ron DeSantis

• Through Executive Order 19-189, Governor Ron DeSantis waived hours of service and truck weights for fuel trucks. Additionally, the State of Florida is requesting surrounding states, such as Alabama and Georgia, to waive requirements as well while trucks move throughout the Southeast in preparation of Hurricane Dorian.
• Florida is working with industry partners to identify additional resources, including trucks, staff, etc. to distribute more fuel throughout the state.
• Florida officials are working with ports along the Florida east coast to monitor resources and assist with closures and re-openings.

The DTN WeatherOps forecast crew works around the clock to provide information during tropical storms, as well as providing insights on pricing fluctuations.