As residents along the southeast coast brace for Hurricane Matthew’s landfall analysts are weighing the storm’s potential impact on oil and gas prices.
Hurricane Matthew is currently projected to hit Florida’s east coast on Friday and move up the eastern seaboard to the Carolinas on Sunday.
The Category 4 storm is unlikely to significantly impact oil and gas production in the region where the bulk of production is concentrated further west in the Gulf of Mexico.
No major U.S. energy firms have flagged potential problems tied to the hurricane.
While the storm will likely have little impact on oil and natural gas production, the hurricane could impact gasoline prices.
Long lines and low supplies at gasoline stations have been reported across the southeast as residents prepare for the storm’s landfall.
However, the storm is not expected to disrupt refinery operations or any major infrastructure hubs, a development that would keep fuel supply levels steady.
Tom Kloza, global head of energy analysis at OPIS, told CNBC that a lack of supply disruptions coupled with a drop in consumer activity could be a “demand destroyer.”
According to the U.S. Energy Information Administration, motor gasoline stocks fell slightly to 223.9 million barrels as of October 2, down from 227.4 million barrels during the previous week.
Total motor gasoline inventories increased by 0.2 million barrels last week, and are above the upper limit of the average range, the EIA said.
East Coast finished motor gasoline supplies climbed 81,000 barrels per day to 3.26 million barrels last week, the EIA said.
Energy demand could also dip if the hurricane causes power outages.
The National Weather Service has warned that the storm could cause widespread power outages along Florida’s eastern coast and the central region of the state.
Bespoke Weather co-founder Jacob Meisel told CNBC that any short-term boost in energy demand related to the storm will likely be offset by a larger falloff once the storm has passed.
Matthew will have likely the largest oil and gas impacts in the Caribbean.
According to Bloomberg, the hurricane could force crude terminals in the Bahamas to shut in about 33 million barrels of oil storage.
Norway’s Statoil confirmed to Bloomberg that it planned to evacuate all nonessential personnel by noon on Tuesday from its 6.7 million-barrel South Riding Point terminal in Freeport.
The company added that the facility was to be secured by Wednesday but the company did not comment on any other impacts tied to the storm.
Houston-based Buckeye Partners, the operator of a 26.2 million barrel terminal in the Bahamas, did not comment on potential storm related impacts at its terminal.