Important oil transmission channels in the United States have been forced to shut down the rise in international oil prices due to network supply.

Published: May 10, 2021 22:03
[major US oil pipelines were forced to shut down due to network supply and international oil prices rose] Colonial Pipeline, the largest fuel passage system in the United States, was shut down on Friday after the cyber attack. As a result, Asian electronic trading on Monday was affected by this. At one point, US gasoline futures soared 4.2 per cent to the highest level since mid-2018, while US heating oil futures also reached their highest level since early 2020. WTI crude oil futures and Brent crude oil futures also rose more than 1% at one time, and the performance of SC crude oil in the inner market was stronger in early trading.

Colonial Pipeline, the largest fuel passage system in the United States, was shut down on Friday after a cyber attack. As a result, Asian electronic trading on Monday was affected by this. At one point, US gasoline futures soared 4.2 per cent to the highest level since mid-2018, while US heating oil futures also reached their highest level since early 2020. WTI crude oil futures and Brent crude oil futures also rose more than 1% at one time, and the performance of SC crude oil in the inner market was stronger in early trading.

The Colonial pipeline, which runs between Houston, Texas and Linden, New Jersey, carries more than 2.5 million barrels of fuel a day. This accounts for about 45% of the total fuel consumption on the densely populated east coast of the United States.

It also supplies aviation fuel to major US airports, which could have an impact on air traffic if supply disruptions become severe. The pipeline also provides fuel for U. S. military bases in its covered area.

In some states served by the pipeline, such as Alabama, Florida, Georgia and Tennessee, demand rose 4.3 per cent on Saturday from a week ago, according to Patrick DeHaan, head of oil analysis at GasBuddy. He warned drivers not to panic to buy, and thought that rushing out to refuel would make the problem worse, and if this happened, it could double or triple the supply time. " Colonial said on Sunday that its main fuel pipeline remained closed, but that some small pipelines between the terminal and the point of delivery had now resumed operation. The company did not say when to restore full operating capacity.

The line, described by one analyst as the "throat of infrastructure" in the US, could cause retail gasoline prices to soar ahead of the summer driving season, potentially hitting both US consumers and the economy if it is shut down for a long time.

"the biggest unknown is how long the shutdown will last, but it is clear that the longer the shutdown lasts, the more optimistic the refined oil prices will be," ING Economics said in a report.

"We expect the pipeline to restart within a few days, so the impact on refineries in Louisiana and eastern Texas will be limited," said Virendra Chauhan, an analyst at Energy Aspects. He also pointed out that US fuel stocks are "good".

The attack prompted members of Congress to call for enhanced protection of America's vital energy infrastructure from hackers.

The Department of Energy said it was monitoring the potential impact of the incident on US energy supplies, while the Cyber Security and Infrastructure Security Agency and the Transportation Security Administration said they were studying the situation.

Goldman Sachs (Goldman Sachs) expects oil demand to reach pre-novel coronavirus levels by the end of this year, and expects Brent crude prices to reach $80 a barrel within six months and US WTI crude to reach $77 a barrel.

"We expect the gap in the global oil market to widen significantly from current levels, which is about 1 million barrels per day," Goldman Sachs analysts said in a report. " Its table predicts that oil demand will reach 100 million barrels per day by the end of this year.

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