The biggest gasoline market in the U.S. is bursting at the seams.
Traders are lining up to export gasoline and diesel from New York Harbor, an area that normally relies on fuel imports from Europe and eastern Canada, shipping data compiled by Bloomberg show.
While at least 6 cargoes that were headed to New York from Europe in January and early February were diverted to the Caribbean or the U.S. Gulf Coast, that wasn’t enough to stem the oversupply building up in terminals along the Eastern Seaboard. Record-high inventories in the region are now pushing prices low enough to turn the typical trade flow on its head.
“We have been exporting out of the New York Harbor, but clearly not enough, so that’s putting pressure on the products,” said Robert Campbell, head of oil products research for Energy Aspects, by phone from New York Thursday.
At least two million barrels of clean products like gasoline and diesel are planned to be exported from New York Harbor and Philadelphia in coming days. BP Plc and Glencore Plc are among shippers sending fuels to West Africa and Europe as the U.S. East Coast saw its gasoline stockpiles break a fresh record high for the third consecutive week.
Gasoline supplies in the Central Atlantic region of the East Coast, the delivery point for New York Mercantile Exchange futures contracts, rose to a record 42.3 million barrels last week, according to the U.S. Energy Information Administration. Imports of fuel to the entire East Coast averaged about 350,000 barrels a day in the first 11 months of 2016 while exports averaged 138,000 barrels, EIA data show.
Total U.S. gasoline stocks also touched a record 259 million barrels, even as American refiners produce less fuel during the height of refinery maintenance season. U.S. crude unit outages are expected to average about 1 million barrels a day this month, and peaked last week at 1.29 million, data compiled by Bloomberg show.