Cost of heating oil looms over northeast U.S.
Forecasts for a mild winter have kept oil prices relatively low, but a cold snap in the Northeast "may drive prices sharply higher for short periods to attract cargoes from further away," Bloomberg reports.
Why it matters: A Philadelphia refinery facility closed earlier this year, leaving only four along the East Coast. Questions over how the Philadelphia supply will be replaced “means we are going to draw stocks heading into the winter and are going to have a fairly tight market,” Robert Campbell, head of oil products research at Energy Aspects, told Bloomberg.
- As a result of the closure, the Northeast will need an extra 100,000 barrels each day of heating oil and diesel, Bloomberg notes.
- Meanwhile, homeowners will be left to compete with tankers and container ships starting in January, when new cleaner-fuel rules go into effect globally. That will divert some of the diesel that could be burned in homes to the vessels.