Gasoline futures for July delivery were up more than 4% on the NY Mercantile Exchange, overtaking an increase in WTI, as a fire continues to burn through the Philadelphia Energy Solutions oil refinery in South Philadelphia on Friday, according to data from Bloomberg.
The Philadelphia refinery is "the largest such plant on the U.S. East Coast and the main supplier to the local gasoline market."
As of 7AM, the fire was still not under control, according to the Philadelphia Fire Department.
The PES complex can handle up to 335,000 barrels of crude per day and is the main supplier of fuel to the New York Harbor market, where inventory is already below average seasonal levels. The complex has plants at Point Breeze and Girard Point in Philadelphia.
After a leak in an alkylation unit, an explosion sent the complex ablaze, forcing the Girard Point section to shut down. The Point Breeze section had already been under repair due to a fire earlier this month. Due to the fact that it is a chemical fire, officials are saying it could burn all day.
Joe Brusuelas, Chief Economist at RSM US LLP said: “Any shortage ahead of the peak of the summer driving season does not bode well for U.S. consumer pocketbooks. The video of the early morning explosion is horrific.”
Gasoline demand nationwide was already at a record last week, nearing 10 million barrels per day.
There was a shelter-in-place for parts of South Philadelphia due to the smoke plume from the fire, but it has since been lifted. The site has been home to refining operations for more than 150 years. Prior to PES, the site was owned by Chevron and Sunoco.