Philly Oil Refinery to Shut Down Permanently! Oil Price Tends to Increase even Further!

Last week, Philadelphia Energy Solutions Refinery (PES) had to shut down after a massive fire and explosion at its plant without a schedule to reopen. PES is the 10th largest refinery in the US and the largest oil refinery on the East Coast with a capacity of 335,000 barrels of crude oil a day.

The price of crude oil has been hiking on the week of the incident, and the explosion that erased 335,000 barrels of oil per day from the market had made the oil price to increase further this week.

WTI gained 4.32% in the last five days to currently trade at $59.07/bbl while Brent’s price increased by 2.78% to trade at $66.23/bbl.

“It’s a short term positive sentiment to oil price,” said many analysts.

 

However, on June 26, 2019, a report came in, saying that the plant will be shut down permanently as the explosion made it impossible to recover, and it is now seeking for buyers. There will be over a thousand workers losing their jobs.

“Today, Philadelphia Energy Solutions made the difficult decision to commence shutdown of the refining complex. While our teams include some of the most talented people in the industry, the recent fire at the refinery complex has made it impossible for us to continue operations,” PES’s CEO, Mark Smith said.

“We are grateful that the fire resulted in only a few minor injuries. I want to thank our employees for their hard work and dedication and to thank the Philadelphia community for their support. We are committed to an orderly process to safely wind down our operations.”

Mayor of Philadelphia Jim Kenney said that he was “disappointed” that so many workers would lose their jobs.

Could the shutdown lead to a longer hike in oil price?