Storm Alert – Tropical Storm Ida – Code Red

Hurricane Ida made landfall yesterday near Port Fourchon as a Category 4 Hurricane, among the strongest storms ever to hit the US. The storm brought intense storm surges and is expected to dump up to two feet of rain. Traveling further inland now, Hurricane Ida has weakened to tropical storm strength.

With wind forces so strong that the Mississippi River’s flow was temporarily reversed, the effects of the hurricane are spreading throughout fuel markets. Colonial Pipeline Lines 1 and 2 were shut over the weekend as a precautionary measure, remaining offline until the company can inspect for damage. Platts estimates that 4.4 million barrels per day (MMbpd) of refinery production are in the storm’s path, and at least 2.4 MMbpd are currently offline. Goldman Sachs estimates that the total supply loss from the storm will be 9 million barrels (375 million gallons) of gasoline and 7.4 million barrels (310 million gallons) of diesel.

Over a million residents throughout Louisiana and Mississippi are without power, and power line repairs may take weeks. Power outages will cause fuel terminal outages until power can be restored. Fuel haulers pulled trucks off the road as strong winds approached, though carrier capacity should improve as strong winds and heavy rains move further inland.

Mansfield is moving to Code Red for Louisiana and Mississippi markets and requests that customers place orders 72 hours in advance. Alabama and Mississippi have also both declared states of emergency as the storm moves closer toward them. Adequate lead time on deliveries ensures supply and freight availability can be secured. Markets are severely constrained due to power outages and carrier capacity constraints. In addition, flooding may make road conditions hazardous in some areas, delaying or preventing fuel deliveries. Mansfield is also moving to Code Yellow in the Florida Panhandle, given the area’s reliance on fuel shipped from Texas and Louisiana. Mansfield will continue monitoring market conditions and will provide updates as recovery efforts take place.

Market Condition Report - Disclaimer
The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made. This material and any view or comment expressed herein are provided for informational purposes only and should not be construed in any way as an inducement or recommendation to buy or sell products, commodity futures or options contracts.

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