The supply glut on the U.S. gasoline market could ease in the wake of a fire at ExxonMobil’s refinery in Baton Rouge, Louisiana. The plant has a throughput capacity of more than 500,000 barrels per day (bpd) and is the country’s fifth-largest oil-processing facility.
The fire broke out overnight following an explosion along a natural gas line. The blaze forced ExxonMobil to suspend operations at all three of the refinery’s crude distillation units (CDUs) and eventually prompted the closure of some secondary processing and petrochemical units as well.
The disaster is sure to have an impact on U.S. gasoline markets since the Baton Rouge plant delivers refined fuels to customers across the Southeast and along the East Coast as far north as New York Harbor. It also has the potential to give fuel prices a lift, given that stock levels hit record highs late last month.
Indeed, the Gulf Coast market saw spot prices for gasoline rise by $0.0113 per gallon on the morning of February 12. This increase served to narrow the discount to NYMEX RBOB futures to $0.0813.