As Hurricane Nicole strengthened and edged closer to making landfall in Southeast Florida Wednesday night, fuel analysts said they didn’t anticipate diesel supply levels there to be impacted much.
Florida ranks as one of the top consumers of diesel fuel in the U.S. according to the Department of Transportation. Only California and Texas consume more. Since there are no refineries in the Sunshine State, fuel is largely shipped in by barges at ports.
On Wednesday evening, the U.S. Coast Guard shut down normal commercial traffic at several ports as Nicole strengthened to a Category 1 hurricane with maximum sustained winds at 75 mph. The eye of the storm is projected to make landfall at West Palm Beach tonight and continue on a northwestern path to the eastern Panhandle by tomorrow evening. From there, the storm is expected to take northeastern path across Georgia and into the Carolinas by Friday afternoon at which point it’s expected to be downgraded to a tropical depression.
Though port shutdowns in Florida can interfere with fuel shipments, the storm’s relatively low strength has fuel analysts thinking that diesel supply impact will be minimal.
“In terms of the ports shutting down, there shouldn't be much impact but it really all is contingent on how quickly ports can get back online and reopen,” said Patrick De Haan, the head of petroleum analysis at Gas Buddy. “But who knows? If there's any damage at all, there could be some sort of fallout, but I'm hoping that since it's a small storm, we won't see much.”
Tom Kloza, the global head of energy analysis at Oil Price Information Service, also doesn’t see Hurricane Nicole having much effect on fuel supplies.
“I don't see much impact from [Hurricane Nicole] on diesel or on gasoline,” Kloza said. “Notably, all storms destroy some demand and it is the rare storm that destroys supply.”
Though Hurricane Ian was a much stronger Category 4 storm when it hit Southwest Florida in September, diesel was largely unaffected.
“Ian didn't really have an impact on diesel although it probably resulted in a bit of a surge for all the special services required in Florida after the impact,” Kloza said. “Diesel gets lifted by construction and other activity after a storm—gasoline demand gets stunted.”
Major storms can significantly interrupt diesel supply and distribution. In the case of Category 5 Hurricane Michael in 2018, diesel was sequestered for government use only in areas hardest hit by the storm like Panama City. At that time, Waste Management relied on a local compressed natural gas (CNG) station to keep its CNG trucks on the road while its diesel trucks remained idle.
