Oil prices have increased after a massive fire damaged Philadelphia Energy Solutions’ major refinery on the US East Coast.
Front-month Brent crude futures rose 84 cents at $65.89 per barrel, while US West Texas Intermediate (WTI) crude futures edged up $1.08 at $58.91 per barrel, Reuters reported.
Philadelphia Energy is expected to permanently close its oil refinery following the fire that damaged the complex located in the densely populated part of the US East Coast, according to two sources familiar with the plans. After the fire, the plant had already declared force majeure on some supplies of gasoline.
Oil prices further gained support after data released by the American Petroleum Institute (API) highlighted a decline in US crude stockpiles by 7.5 million barrels in the week ended 21 June to 474.5 million.
Olivier Jakob of Petromatrix told Reuters: “Oil is up in reaction to the API data combined with the refinery disruption on the US East Coast. Gasoline is up and leading the complex and helping to keep momentum up on crude.
“Refinery margins are improving globally because if that refinery can’t operate then you’ll have to compensate with higher runs elsewhere.”
The fall in crude inventory and Philadelphia Energy’s refinery outage added to uncertainty over oil supplies created by the war of words between Washington and Tehran.
US President Donald Trump threatened to destroy parts of Iran in case the country attacked “anything American”. Bilateral tensions between the countries increased after Iran forces shot down a US drone last week in the Gulf.