Gasoline futures rise after cyberattacks shut down much of U.S. pipelines

May 11, 2021: -On Monday, Futures for fuel prices rose as much of one of the largest pipelines in the U.S. are closed after a cybersecurity attack.

Gasoline futures increased 1.4% to $2.156 per gallon, which pulls back slightly from their highest levels of the session overnight. Heating oil futures also increased 0.9% to $2.03, also of the highest levels of the session.

Colonial Pipeline said that some of its small lateral lines between terminals and delivery points are online but that its main lines are still closed.

“We are processing to restore service to other laterals and will bring our full system back online when it is safe to do so and in full compliance with the approval of all federal regulations,” the company said.

Colonial Pipeline, which operates the most significant pipeline carrying fuel from the Gulf Coast to the Northeast, “halted all pipeline operations” as a proactive measure following the ransomware cyberattack.

The pipeline is a critical part of the petroleum infrastructure of the U.S, transporting nearly 2.5 million barrels each day of gasoline, diesel fuel, heating oil, and jet fuel.

The pipeline encompasses over 5,500 miles and carries around half of the East Coast’s fuel supply. The system also provides power for airports, which include Atlanta and Baltimore.

On Saturday morning, Joe Biden was briefed on the pipeline closure, and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency will coordinate with Colonial Pipeline.

The pipeline outage comes as Americans begin to travel again as restrictions are released, and the Covid vaccination rollout accelerates. On Friday, the TSA screened over 1.7 million passengers, the highest in over a year.

“The Colonial outage comes at a critical juncture for the recovering U.S. economy: the start of the summer driving season,” noted ClearView Energy Partners. “A sustained disruption that leads to a significant pump price spike could increase prospects of domestic policy interventions,” the firm further said.

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