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Stephen Schork, editor of the Schork Report, weighs in on how Hurricane Sandy stands to impact the oil and gas industry.
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As refineries Stephen -- is editor of the -- report and oil and gas newsletter that I follow religious week as you are always right on target.
Tell me what refinery operations are are in the way here.
We're talking about Melissa the epi center on the East Coast refinery industry what's a lot to augment -- -- between Delaware and New York Harbor.
Upwards of one point one million barrels a day of refinery capacity is in the wake of this storm at this point.
So now we have potentially a perfect storm and a perfect event for the energy markets because we do have a dearth of refinery capacity we've lost three to 500000 barrels a -- capacity because of refinery economics over the past two years.
So we already have low refinery capacity and we have very low.
-- stocks of gasoline and diesel fuel so if you get any sort of prolonged that I've not got to any one of these -- just one of these refineries.
-- because of a power outage flooding what have you and it stays -- line for a week.
We could see a very violence.
-- be short lived.
Reaction in the market -- price is higher yeah the move.
-- you -- my questions is I was gonna say I didn't think we had new refineries left on the ease with the rate we're going at that point a one point one million barrels a day is quite a lot.
Where would we find that shift in supply from somewhere around three to those refineries got shot and you know where -- led the locals be buying gas from.
Right that we -- you have options op on the East Coast -- does that -- a month ago we have a situation in California we all remember right gasoline prices were surging there.
But California is different because it essentially an island unto itself and it did I decouple from the U pipeline infrastructure on the east.
So there is a robust trade pipeline product will be shipped up from the Gulf of Mexico up from the refineries down there like you know is is.
We could get some sort of temporary waiver of the Jones act which would allow even more vessels to barge products away from the Gulf of Mexico -- into your -- And similar to what we saw in Katrina there is a -- I'm very viable.
Bob cross elastic I trade between our refineries in northwest Europe and New York Harbor so that's why did but -- the price action could potentially violent.
But I can't see the last thing too long because there are avenues to get around any sort of prolonged disruption in the -- all.
Of one of the differences between this and what happened in California as you -- I -- California.
Has its own special cocktail a gasoline us so it couldn't get gasoline from other places but also that rising price didn't necessarily impact its neighbors because they couldn't share anyway.
But would this it would have morbid domino effect and other communities.
Nearby because we would be borrowing gasoline from them right.
Are we indeed.
Absolutely.
That that won't we look we're in now we're essentially November's or all -- selling or do retailers are selling.
-- -- gasoline so that in and of itself will will help.
Yeah again.
Younger.
While any sort of significant prolong that are rally.
But certainly -- it's a wait Citi yeah interestingly enough though the market really isn't that higher.
-- it is not an impressive fashion -- the market really seems to be taking kind of a wait and Citi.
I say yes we are strong today but -- given what we're potentially facing who gets really interesting action in the market now.
-- and and I mean the other point is that we were seeing a really nice decline in gasoline futures -- could have maybe helped the public can help consumers out there ten days in a rally this put a floor -- so even though we have seen a big bounces just about we gotta go Stephen -- thank you over the coming -- you know.
