Post-Sandy Gas Shortage Devastates East Coast
Millions along the East Coast are still without electricity in the wake of hurricane Sandy. As the markets opened in the aftermath, investors were quick to jump on storm-related stocks like generator manufacturer Generac Power Systems (NYSE:GNRC). The stock price was pushed to a record high in anticipation of a demand rush for commercial and residential generators. With power expected to be out for days, generators are running around the clock to heat homes and keep business and government operational.
In a dark bit of irony, many of the gas stations that are providing the fuel for the generators are running on generators themselves. As public transit fights its way back into an operational state and people get back in their vehicles as roads clear, the demand for gas is far outstripping the available supply. Many gas stations don’t have the supply necessary to keep themselves open.
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According to AAA, only 35 percent of gas stations tracked by the company on Long Island are operational. In New Jersey, AAA reports only 40 percent of gas stations tracked are operational. The New York Times is reporting lines of hundreds of cars waiting for gas in New Jersey, with supplies running out and pumps shutting down long before fuel needs are met.
Refineries operated by Phillips 66 (NYSE:PSX) and Hess (NYSE:HES) shut down entirely before the storm hit. Damage from the storm has disrupted supply lines and major chains like Exxon Mobil (NYSE:XOM) are unable meet demand. Efforts to truck in additional gasoline have been bogged down by crowded highways, and a major pipeline running from the Gulf of Mexico is not expected to be back online until Friday.
Gas prices have been locked in place, with Governor Chris Christie promising to prosecute anyone caught gouging. Prices in New Jersey had been set at $3.59 per gallon last week. Prices in New York are averaging nearly $4 per gallon. The nation-wide average is about $3.50 per gallon.
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