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Gas prices rise as refineries brace for Sandy

Refineries along the Eastern Seaboard braced for Hurricane Sandy Friday, putting in place emergency plans ahead of the storm's expected landfall in the Northeast early next week.
 
Six East Coast oil refineries representing 1.19 million barrels per day - or 7 percent of total U.S. capacity - could potentially be hit by the deadly storm, which left at least 41 dead as it roared through the Caribbean and churned northward.
 
The storm threat boosted gasoline and heating oil prices in New York trading over the past two sessions.
 
Forecasters say Sandy is expected to be pulled in by another storm system moving from the west, making it come ashore in the northeast late Monday or early Tuesday and unleashing heavy rains, storm surges and possibly near hurricane-force winds.
 
Some forecasters say Sandy has the potential to be a multibillion-dollar disaster, wreaking greater damage than last year's Hurricane Irene, but it was too soon to tell its actual trajectory, and refiners were taking early steps to prepare.
 
"Both our East Coast refineries have comprehensive hurricane preparedness procedures in place that they will implement based on the storm track, as they did last year for Hurricane Irene," said Michael Karlovich, a spokesman for PBF Energy.
 
PBF Energy owns and operates two East Coast refineries in Delaware and southern New Jersey.

Phillips 66, owner of a rfinery in Linden, N.J., said it is monitoring the storm. 

"All of our East Coast operations continue to operate normally while we prepare our facilities for the storm," said Rich Johnson, a spokesman for the company.
 
Hurricane Irene, which hit the region in August 2011, caused severe flooding and power outages all along the East Coast, and some refinery disruptions. Phillips 66 closed its Bayway refinery while other refiners cut back rates, but the oil industry escaped Irene with little damage. 

Oil markets are watching for any potential disruptions to gasoline and heating oil supplies, as lean fuel stockpiles in the region make the East Coast vulnerable to price spikes, especially ahead of the winter heating season. 

Vessels in and out of some southern and mid-Atlantic ports are being restricted and advised to batten down.

In New York trading, crude oil edged up 23 cents to settle at $86.28 a barrel, and gasoline futures rose 2.27 cents to settle at $2.6991 a gallon, after jumping nearly 3 percent the previous session.

Will Hurricane Sandy impact oil prices? Andy Lipow, Lipow Oil Associates president, weighs in.