Prices for fuel futures such as gasoline were stabilizing Monday after the largest U.S. pipeline network, Colonial, which crippled operations this weekend by a cyberattack, said it expects to restore services soon.
Gasoline futures contracts soared this morning to $2.216 a gallon, a high not seen in three years, then moderated to $2.13 after the company, which supplies nearly half the fuel on the U.S. East Coast, predicted a return in a matter of days.
Texas crude oil contracts, the U.S. benchmark barrel, have gone through a volatile morning, rallying sharply near the open to a peak of $65.5, then falling to below $64 on the news, although an hour before the close of trading they were back up to $65.
The Georgia-based company will “facilitate the return to service in a phased approach” and the plan, which must respect safety factors and protocol compliance, “aims to restore operational service substantially by the end of the week,” it said in a statement.
Colonial transports up to 2.5 million barrels of gasoline, diesel and jet fuel a day from refineries in the Gulf of Mexico to the south and east of the U.S., and in view of the stoppage of operations, the government lifted restrictions on fuel transportation by road on Sunday to avoid shortages.
The market is closely watching the Colonial situation ahead of the summer season, when U.S. road travel is on the rise and is expected to contribute to economic recovery, so the possibility that supplies could be restored in a matter of days has calmed the mood.
“Anxiety around the situation is easing, especially if the cyberattackers are true to their word and do not seek to strangle gasoline supplies to most of the country. To the extent that this looks like it will be resolved quickly, the premium associated with fear will dissolve,” said John Kilduff of Again Capital.
The FBI on Monday pointed to the Darkside hacking group as responsible for the ransomware attack, through which they blocked access to the company’s computers and demanded money to free them, and said it continues to work with the company and its government partners in the investigation.