Pennsylvania refinery fire juices energy market
June 21st, 2019
Energy Solutions refinery in Philadelphia had an explosion early this morning and fire. This has juiced the energy market up as traders cover positions as a reaction the news. It is Friday and uncertainty about the damage and impact to this refinery could mean a scramble to get gallons so traders buy now to put their protection in place. This refinery is a big supplier of gasoline to the East Coast and gas prices took a big jump higher after the news hit the market. Prices have eased off their highs but as the day moves on we will see what develops.
The other news overnight is the report out of the White House that confirmed the US called off military strikes against Iran late Thursday night. These strikes were approved by President Trump.
Also supportive to energy prices yesterday was a large drop in the US dollar index of 0.6% down near a two and a half month low. The US Federal Reserve and the European Central Bank are expected to cut interest rates in the near term months to help sustain economic growth which will boost energy demand. Cutting interest rates is bearish for the US dollar and in turn bullish for crude oil prices.
Iran tensions, refinery fire and tons of uncertainty have the market trading up strong today as we head into the weekend.