The largest refinery in the east coast suffered an explosion Friday morning, which prompted a move higher in gas future prices.
Philadelphia Energy Solutions is a 1,300-acre complex with a capacity of 335,000 barrels a day, CNBC reported. At around 4:00 a.m. ET, a large explosion occurred and was felt as far as southwest New Jersey. As of 7:20 a.m., there were no notable injuries reported and the fire is contained with "no detectable inhalants," according to the Philadelphia Fire Department's Twitter page.
Gas futures on the New York Mercantile Exchange rose more than 3% following the explosion.
"Oh my gosh, look at this!" See the moment an explosion took place as our cameras rolled on a fire at a South Philly refinery this morning: https://t.co/63C5bTtVO7 pic.twitter.com/ESocfZIaLM
— NBC10 Philadelphia (@NBCPhiladelphia) June 21, 2019
Why It's Important
The explosion comes at a time when demand for gasoline hit an all-time high last week. American drivers consumed a record high 9.9928 million barrels of gas per day last week, which is up from 9.3 million barrels a day a year ago, according to CNBC.
Philadelphia Energy Solutions is an important component of satisfying fuel demand in the east coast. As such, any gas outages from the facility will "greatly affect" the east coast region, John Kilduff of Again Capital told CNBC. While there is a "cushion" for drivers because of a well-supplied gas market, if the damage to the facility is "major" it will "change that dynamic dramatically."
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