The biggest gasoline market in the U.S. is bursting at the seams. Traders are lining up to export gasoline and diesel from New York Harbor, an area that normally relies on fuel imports from Europe and eastern Canada, shipping data compiled by Bloomberg show.
While at least 6 cargoes that were headed to New York from Europe in January and early February were diverted to the Caribbean or the U.S. Gulf Coast, that wasn’t enough to stem the oversupply building up in terminals along the Eastern Seaboard.
Record-high inventories in the region are now pushing prices low enough to turn the typical trade flow on its head. The refineries have been working at near capacity levels and we actually have a glut of these products backing up in New York, one of the nations chief export locations.
Why is this good news? There are a couple reasons. First of all, the aforementioned supply and demand laws mean that there is downward pressure on the price of gasoline so you may be experiencing a bit of additional benefit when you go to fill up the tank. That applies to commercial operations as well, so when their transportation costs go down, their overhead is decreased and prices for other goods and services may similarly decrease.
But at the same time we are forcing more product overseas and strengthening our position as we compete with other exporters in Russia and the Middle East.