With gas and oil prices already at record highs, the last thing we need is a natural disaster that causes them to rise even more. But unfortunately, that’s exactly what happened on Friday.
According to WDSU-TV in New Orleans, Marathon Petroleum’s Garyville, Louisiana refinery went up in flames Friday morning – literally.
Now, to be clear, the fire did not destroy the entire refinery. Per reports by NOLA.com, the website for the New Orleans Times-Picayune, it did shut down the plant for a time, as it and the surrounding two-mile radius of the refinery were evacuated. The fire was considered officially extinguished as of Monday morning.
The Wall Street Journal reported, “Out of an abundance of caution, the facility began a shutdown process of units closest to the fire this morning (Friday.) As the fire-suppression efforts continue to progress, facility operations will continue to be evaluated, with safety as our top priority.”
But while the refinery is now out of danger, diesel and gas prices are at risk. Largely, this is because the refinery is the third largest in the whole of the United States. Naturally, a potentially dangerous and damaging fire there could have lasting repercussions on the oil and gas industry.
Additionally, as Bloomberg noted, this is the third fire to have been reported at this particular plant in less than a year, although this has been the largest fire yet.
As of Friday, the price of diesel futures had already risen 4.8 percent, ending at $3.31 a gallon. This is the highest it’s been since January 26.
Oil prices are flat but refining cracks are coming in. Natural gas prices are up after Australian LNG facility strikes appear more likely. A fire at Marathon's Garyville refinery on Friday caused diesel to rip 16cpg higher. #OOTT
— StoneXEnergyKC (@EnergyKc) August 28, 2023
As Patrick De Haan, an analyst for the Gas Buddy website, wrote on social media, the fire “could cause a low, yet far-reaching impact to #gas prices.”
Only time will tell just what those effects will be.