Colonial Pipeline has a surplus of 77/88 grade (high sulfur heating oil) and 45,000 barrels will be available for purchase during three auctions Wednesday at the Dorsey Junction in Maryland, the company said in a notice to shippers Monday morning.
Each auction will offer 15,000 barrels deliverable at South Baltimore or Curtis Bay. The minimum bid amount is 50 cents/gal. The available delivery cycles are 13 and 14, and volumes cannot be nominated into Colonial storage, the notice said.
The notice said tariffs will be billed additionally on delivery, with basis Gulf Coast. Winning bidders are not automatically entitled to extra line space in allocated or frozen cycles.
An Atlantic Coast market source said the surplus of high sulfur heating oil stems from full inventories and low demand in the Northeast.
"We are still trying to sell our inventory," he said. "It's a pretty mild winter ... and nobody uses straight heating oil up here anymore. Pennsylvania is all done with it, and Laurel won't ship it. Unless you have a lot of storage to blend it with ULSD to get low sulfur, it is a useless product up here."
