Home / Business / Gasoline prices rise as the largest refinery on the East Coast closes the store

Gasoline prices rise as the largest refinery on the East Coast closes the store

RBOB gasoline futures jumped overnight, accelerating their recent rise since the blast and massive inferno at the Philadelphia Energy Solutions (PES) plant, after Reuters reported that the largest refinery on the East Coast is expected to try their hand Oil refinery shut down permanently in the city after a massive fire had damaged the complex significantly.

The closure of the refinery, the largest and oldest on the US East Coast, would result not only in hundreds of lost jobs but also significantly higher gasoline prices than gasoline deliveries. The SPE is expected to sign a memorandum of understanding on Wednesday State and federal regulators initiating the closure process of the refinery.

The refinery, which could change its plans, is scheduled to begin operations on Wednesday with layoffs of 700 unionists at the plant, Reuters reported. The redundancies could include about half of the union workforce, with the remainder remaining at the site until completion of the explosion investigation.

As already reported, the complex is located in a densely populated area at 335,000 bpd (bpd) in a populated area in the south of the City that burst into flames in the early morning on Friday in a series of explosions that could be heard for kilometers, some of which were compared to a meteorite strike or an exploding atomic bomb The cause of the fire was still unknown on Tuesday, although the city fire department announced that it started around 4:00 am (8:00 am GMT) in a butane vat. It destroyed a 30,000 bpd alkylation unit that uses hydrofluoric acid to process refined products. If the acid had caught fire, it could have caused a cloud of vapor that can damage the skin, eyes and lungs of the local people.

Before the massive inferno, the refinery had been through years of financial struggles, shattering employee benefits and reducing capital projects to save money. She went through bankruptcy last year to liquidate her debts, but her difficulties continued when her cash balance fell even after the bankruptcy in August. Some have speculated that cutting costs has made the structure unstable and prone to accidents.

Following the bankruptcy, Credit Suisse Asset Management and Bardin Hill became the controlling owners, with former primary owners Carlyle Group and Sunoco Logistics, a subsidiary of Energy Transfer. hold a minority stake. Related: The last truly underdeveloped oil border in the Middle East

The fire last Friday was the second in two weeks in the complex where the Mayor of Philadelphia called for a working group to deal with both the cause and the public relations in the wake of the incidents. A spokesman for Mayor Jim Kenney declined to comment on the possible closure of the plant.

This can be difficult, as on-site investigators are faced with unstable structures that require engineers to certify, which slows down the investigation. City officials said. The investigation could eventually take months or maybe years. In addition, the State Department for Environmental Protection stated that it had reservations about the integrity of the storage tanks on site, the agency said on Tuesday. According to Reuters, the US Chemical Safety Board is also investigating the incident.

While nothing new is going to be reported outside of Philly, it's significant for all East Coast drivers that gasoline futures rose by as much as 5.4% on Wednesday, reaching $ 1

.9787 per gallon, the highest price since May 23rd. The first month's price was $ 1.945 early Wednesday.

Futures have risen 8.9% since close of trading on Thursday Premium on US Gulf Benz …

All this will, as always with a delay, the gasoline price at the pump noticeably …

The rally of the US gasoline futures has driven US gasoline prices across the European and Asian markets and increased the prospects for US imports. According to Matthew Chew, oil analyst at IHS Markit, "there is a possibility that (due to the broader price range) the tension between US Gulf / Europe and [the East Coast] PADD 1 will be opened."

From Zerohedge.com

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