Big flames, not a lot of impact: California tank fire contained, I-80 reopens

The cause of the explosions and subsequent blaze is not known, though reports that the cause might have been a somewhat significant earthquake that struck northern California Tuesday – a 4.7 magnitude quake with an epicenter south of San Jose – were mostly dismissed.

No operations at the Phillips 66 refinery in Rodeo were reported to be impacted.

The biggest impact for truckers was the closure of I-80 for almost seven hours. It runs right next to the Phillips 66 and NuStar facilities just west of the Carquinez Bridge that crosses the Carquinez Strait in the northeastern sector of San Francisco Bay. 

As far as price reaction, the explosion and fires occured after trading for the day would have concluded. There was no reaction in the broad product benchmarks overnight and into Wednesday on CME, where RBOB gasoline was lower and ultra low sulfur diesel was slightly higher. Physical trading in California markets would be ongoing as of Wednesday morning but it will take several hours to determine if it is moving higher as a result of the explosion and fire. 

Reaction in the wholesale rack market would take a day to be implemented, as those numbers key off the physical markets trading during the day on Wednesday. Price movements in the San Francisco rack market can be viewed through the ULSDR.SFO

On the surface, there is no reason to believe the market would react in any significant way to the explosion. The only loss is two tanks of ethanol (and reports were they weren’t even full) and there is no loss to refinery operations at Phillips 66 Rodeo.