Markets are going wild in the aftermath of Monday’s Colonial Pipeline explosion, the second outage on the important pipeline in less than two months.
Within minutes, December futures spiked 18.56 cents or 12% to a five month high on the spot continuous chart of US$1.6351/gal. in trading on the New York Mercantile Exchange.
The Colonial Pipeline is a critical conduit for region that has once again been compromised, this time with an explosion and subsequent fire. The pipeline delivers fuel to states along the eastern seaboard, with the 2.5 million bpd 5500 mile pipeline consistently running at or near full capacity. It connects to 29 refineries and 267 wholesale distribution terminals.
During the five weeks since 16 September, East Coast gasoline supply has increased 7.34 million bbls to 62.874 million bbls. If Colonial can restore service on the main gasoline line by 5 November, the price impact will be limited and RBOB futures have likely installed its high in response to the outage during the early moments of the 1 November session.
Read the article online at: https://www.worldpipelines.com/project-news/03112016/market-prediction-following-colonial-pipeline-explosion/