BoeingBoy
Veteran
- Nov 9, 2003
- 16,512
- 5,865
- Banned
- #1
The shutdown of the BP pipeline @ Prudhoe Bay occured after the period covered by this week's EIA report, but I'll try to add some info to give an idea of the effect.
Spot prices on 8/4/06 (8/7/06 / 8/8/06):
NY Harbor jet - $2.2420 ($2.3050 / [email protected])
Gulf Coast jet - $2.2195 ($2.2400 / $2.1975)
Los Angeles jet - $2.2870 ($2.3300 / $2.3650)
WTI Cushing crude - $74.78 ($77.05 / $76.29)
WTI Cushing on 8/9/06 @ 11:30 AM per Bloomberg - $77.10
As can be seen above, the initial reports caused all spot prices to increase by varying amounts. By Tuesday, only the west coast jet prices remained significantly affected (and crude prices, obviously). Prudhoe Bay provides a significant percentage of crude to west coast refineries, and those refineries have no inexpensive way to offset the loss of supply - there is no pipeline connecting them to the supplies of crude in the eastern US (including the SPR). Extra crude will have to be shipped from Middle East sources or through the Panama Canal to make up for the loss of Prudhoe Bay supply and both options will add extra transportation cost to the already higher crude prices. So west coast prices will probably stay higher than normal until Prudhoe Bay supply is restored to normal levels. Meanwhile, NY and Gulf Coast prices will probably be primarily affected by the crude price (barring some disruption in those areas, particularly the Gulf).
From Platt's, the regional spot prices on 8/4/06:
Europe & CIS - $2.228
North America - $2.228
Asia & Oceania - $2.175
Middle East & Africa - $2.141
Latin & Central America - $2.223
The usual graph, move to this week's update for convenience:
View attachment 5079
Not included in the graph, but these are the August average spot prices thru 8/8/06:
NY Harbor jet - $2.2807
Gulf Coast jet - $2.2306
Los Angeles jet - $2.3045
Jim
Spot prices on 8/4/06 (8/7/06 / 8/8/06):
NY Harbor jet - $2.2420 ($2.3050 / [email protected])
Gulf Coast jet - $2.2195 ($2.2400 / $2.1975)
Los Angeles jet - $2.2870 ($2.3300 / $2.3650)
WTI Cushing crude - $74.78 ($77.05 / $76.29)
WTI Cushing on 8/9/06 @ 11:30 AM per Bloomberg - $77.10
As can be seen above, the initial reports caused all spot prices to increase by varying amounts. By Tuesday, only the west coast jet prices remained significantly affected (and crude prices, obviously). Prudhoe Bay provides a significant percentage of crude to west coast refineries, and those refineries have no inexpensive way to offset the loss of supply - there is no pipeline connecting them to the supplies of crude in the eastern US (including the SPR). Extra crude will have to be shipped from Middle East sources or through the Panama Canal to make up for the loss of Prudhoe Bay supply and both options will add extra transportation cost to the already higher crude prices. So west coast prices will probably stay higher than normal until Prudhoe Bay supply is restored to normal levels. Meanwhile, NY and Gulf Coast prices will probably be primarily affected by the crude price (barring some disruption in those areas, particularly the Gulf).
From Platt's, the regional spot prices on 8/4/06:
Europe & CIS - $2.228
North America - $2.228
Asia & Oceania - $2.175
Middle East & Africa - $2.141
Latin & Central America - $2.223
The usual graph, move to this week's update for convenience:
View attachment 5079
Not included in the graph, but these are the August average spot prices thru 8/8/06:
NY Harbor jet - $2.2807
Gulf Coast jet - $2.2306
Los Angeles jet - $2.3045
Jim
