Page 3 - Oil & Energy - March 2013
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March 2013 • 3
The Front Burner
The Federal Motor Carrier Safety
Administration (FMCSA) requires
strict compliance with Federal drug
and alcohol testing regulations for
motor carriers and drivers. Employers
in violation are subject to civil and
criminal penalties.
The NEFI Alliance Consortium is
a simple, quick, and pensive
inex
solution to this federal requirement. As
a non-profit group, the NEFI Alliance
is able to offer this comprehensive
program at a most reasonable cost.
Avoid severe fines…
Join today!
Mandatory Drug & Alcohol Testing
Regulations for Motor Carriers…
It’s The Law!
NEFI Alliance Consortium
238 Bedford Street, Suite 2
Lexington, MA 02420
For program information
and application information,
call 617-924-1000,
fax 617-924-1022, or
email
*Figures taken from Energy Information Administration’s “This Week In Petroleum.”
THE BAROMETER
Comparing Heating Oil to Other Financial Products
February 11, 2013
One Year Ago
No. 2 Fuel Oil/New York (dollars/gallon)
3.289
3.176
WTI Crude (dollars/barrel)
$97.01
$100.39
Brent Crude (dollars/barrel)
$118.29
$118.73
10-year Treasury Bill
1.99%
1.96%
30-year Mortgage
3.39%
3.87%
Dow Jones Average
13,971
12,874
THE DIFF.
Spot Prices (Cents/Gallon) as of February 11, 2013*
New York Harbor
New York Harbor
U.S. Midcontinent
No. 2 Fuel Oil / Heating Oil
No. 2 ULSD
No. 2 ULSD
3.259
3.289
3.256
EIA Says Northeast Can Absorb Loss of Hess Refinery
An announcement by Hess Corp. in late January that it would close its 70,000-barrel/
day (bbl/d) refinery in Port Reading, NJ, triggered a rally in RBOB futures prices, but the
U.S. Energy Information Administration (EIA) says the Northeast region should be able
to absorb the latest loss of refining capacity.
EIA says the Port Reading refinery provided about 10 percent of total gasoline pro-
duction in the Northeast region during 2012, but new sources of supply are available.
The Northeast currently consumes about 1.5 million bbl/d of gasoline, with 34 percent
of supply coming from foreign imports, 33 percent from in-region refinery production,
21 percent from other U.S. regions, and 10 percent ethanol.
Production from Northeast refineries in 2012 includes limited contributions from
Monroe Energy’s Trainer, Pa., refinery, which was returned to service in late September
2012 after being idle for a year. “The Northeast is also importing significantly less
gasoline than it has in recent history,” EIA reported. “In 2012 through November, the
Northeast imported an average of 525,000 bbl/d of gasoline, almost 200,000 bbl/d less
than it imported in 2007. Thus, it is likely there is some flexibility to increase imports,
both from the standpoint of gasoline production, principally in the Atlantic Basin, and
from port capacity in New York Harbor.”
Scheduled to close at the end of last month, the Port Reading refinery produced
gasoline and small amounts of distillate fuels and had only a fluid catalytic cracker for
processing cracking feedstocks. It did not process crude oil. Hess executives say the
company is exiting the refining business to concentrate on exploration and production.
The Hess closing continues a string of East Coast/Atlantic Basin refinery closures that
includes Sunoco’s 185,000 barrel/day refinery in Marcus Hook, Pa., the 350,000 barrel/
day HOVENSA refinery in the U.S. Virgin Islands, and the 235,000 barrel/day Valero
refinery in Aruba.
CME Group Alters Heating Oil Specification
CME Group recently announced that it is changing the specification of its heating oil
contract to contain no renewable fuel or biodiesel. Effective in May, the change matches
heating oil to the grade of ultra-low sulfur diesel (ULSD) carried on the Colonial Pipeline
to the Northeast, according to a report by Reuters.
The change reflects the transition to ultra low sulfur heating oil in New York State.
By choosing a contract specification that does not include renewable fuels, CME Group
hopes it will be easier to attract a larger number of traders, including those in Europe.
“Because the ULSD contract will have no renewable content, it will serve as a dual-use
contract for both Northeast heating oil and the on-road diesel market in the United
States,” CME spokesman Damon Leavell told Reuters. CME Group’s heating oil contract
competes with IntercontinentalExchange Inc.’s higher sulfur gas oil contract in London.
