Gasoline futures skyrocket as many of our critical pipelines remain shut down after a cyberattack

On Monday, September 19, 2016, a sign will appear on the fence of Colonial Pipeline’s Peram Junction and Tank Farm in Peram, Alabama, USA.

Luke Charlett | Bloomberg | Getty Images

Fuel prices soared in trading on Sunday night as one of the largest pipelines in the United States remained closed due to a cybersecurity attack.

West Texas Intermediate Crude Oil Futures, the US oil benchmark, rose 47 cents to $ 65.37 a barrel. International benchmark Brent crude oil traded at $ 68.76 a barrel, up 48 cents. Natural gas futures were $ 2.96 per million British thermal units, while gasoline futures were up 3% to $ 2.193 per gallon.

The colonial pipeline said on Sunday evening that some of the small sidings between the terminal and the delivery point were back online, but the main line was still closed.

In a statement, the company said, “We are in the process of restoring service to other aspects, we are confident that it is safe, and we are fully compliant with all federal regulatory approvals for the entire system. Will be brought back online. ” ..

How quickly services are restored to the pipeline remains an important factor to note. Tank farms typically store fuel supplies for several days, but long-term outages can lead to higher fuel prices.

The Colonial Pipeline, which operates the largest pipeline to carry fuel from the Gulf Coast to the northeast, “shut down all pipelines” on Friday night as a proactive response after a ransomware cyberattack. ..

The pipeline is an important part of the US oil infrastructure, transporting approximately 2.5 million barrels of gasoline, diesel, kerosene and jet fuel per day. The pipeline includes more than 5,500 miles and carries almost half of the East Coast fuel supply. The system also fuels airports such as Atlanta and Baltimore.

“Without this, there is no means of transportation in the area, so it is important to get the pipeline back into service as soon as possible,” said Patrick de Khan, Head of Oil Analysis at Gas Buddy. “The impact can increase exponentially from around day 5,” he added.

President Joe Biden was briefed on the pipeline closure on Saturday morning, and the Department of Homeland Security’s cybersecurity and infrastructure security agencies are coordinating with the Colonial Pipeline.

US Secretary of Commerce Gina Raimondo said on Sunday that this was “all hands-on-deck efforts so far.”

“We work closely with company, state and local officials to ensure they return to normal operations as soon as possible and there are no supply interruptions,” she said on CBS’s “Face the The Nation.” I told Nation.

Pipeline outages occur when Americans begin their journey again as restrictions are lifted and the deployment of Covid vaccination accelerates. On Friday, TSA screened more than 1.7 million passengers. This is the best in over a year.

“The colonial outage is at a critical time for the recovery of the US economy. It’s the beginning of the summer driving season,” said ClearView Energy Partners. “The persistent turmoil that leads to significant pump price hikes could raise the prospect of domestic policy intervention,” the company added.

According to AAA, the national average of 1 gallon of gas was $ 2.962 on Sunday, up 60% from a year ago.

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–CNBC’s Emma Newburger contributed to the report.

Gasoline futures skyrocket as many of our critical pipelines remain shut down after a cyberattack

Source link Gasoline futures skyrocket as many of our critical pipelines remain shut down after a cyberattack

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