Early Friday morning, a massive explosion occurred in south Philadelphia at the Philadelphia Energy Solutions Refining Complex. The 150-year-old oil refinery, opened in 1866 just after the Civil War, had a vat of butane ignite and explode causing Interstates 76 and 95 to close and even “rattled” homes in the South Jersey area.
The largest plant on the East Coast, the Philadelphia Energy Solutions oil refinery is the main supplier to the local gasoline market. Comprised of Point Breeze and Girard Point plants, the complex handles roughly 335,000 barrels of crude a day including the New York Harbor market.
Although the fire was contained but not under control, according to earlier reports, the chemical fire could last all day. This was the second fire this month following a June 10th fire. This explosion occurred on the first day of summer and just as driving season kicked off. Gasoline futures jumped 3.5% Friday morning mainly because futures reflect New York harbor prices. “It’s a serious outage that’s going to greatly affect the East Coast in particular,” said John Kilduff of Again Capital. “There’s a cushion for drivers because we’re well supplied, but if there’s major damage, it’s going to change that dynamic dramatically.”
With Gasoline demand at an all-time high, US drivers should be aware of potential increase in prices. US drivers consumed a record 9.9928 million barrels a day last week. Although updates are still being reported, any major damage will not bode well for the East Coast specifically.