U.S. crude oil prices and gasoline prices surged early in the Asian session on the 10th, with gasoline futures prices once soaring more than 4% and climbing to the highest since May 2018, as U.S. East Coast pipeline operator Colonial Pipeline suspended all pipeline operations following a hacker ransomware attack.
The U.S. government declared a state of emergency on the 9th, trying to maintain fuel supply line operations amid market concerns about fuel shortages due to major pipeline closures.
At around 6:30 a.m. Taiwan time on the 10th, New York West Texas June crude oil futures opened up a sharp 1%, with gains later converging to 0.9% at $65.50 a barrel.
RBOB gasoline June futures traded on the New York Mercantile Exchange surged 4.24 percent at one point, later converging to 1.6 percent at $2.16 per gallon.
The U.S. Department of Transportation has issued a state of emergency for 18 states and D.C. on the East Coast, lifting several restrictions on ground fuel shipments to soothe the impact of the ongoing closure of the Colonial pipeline. The DOT said, “This declaration resolves the emergency that necessitated the immediate transportation of gasoline, diesel, fuel and other refined oil products and provides the necessary relief.”
Colonial Pipeline Company, which is responsible for 45 percent of fuel transportation on the U.S. East Coast, suffered a hacker ransomware attack last Friday (7th) and was forced to shut down its entire system. The hacker took control of the victim’s computer system or data by planting malware and demanding a ransom before being willing to release it.
Colonial said late on the 9th that it is still discussing plans to restart the main pipeline, but smaller pipelines at crude terminals and delivery points have resumed operations. However, Colonial could not say when it would resume full operations.
According to sources, oil traders and fuel transporters are looking to ships to deliver gasoline that would otherwise be transported on Colonial’s pipeline system. Others are seeking temporary storage of gasoline in the U.S. Gulf of Mexico by tanker.
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