Colonial Pipeline Threat Continues, Oil Price Nears $70

The Colonial Pipeline hacking’s spillover effects continue to propel prices up, even when a partial reopening has already been hosted by the company.

In the latest update, the United States’ largest fuel conveyor restarted operations on Wednesday, although to a much lesser extent than normal operations.

The company has been hit by a ransomware attack earlier in the week that sent its overall running at a temporary halt.

Analysts estimated that this has led to the disruption of about 2.5 million barrels of daily production.

The firm’s management has a statement earlier saying that they are adamant not to give the hackers what they ask for, which is cash.

Experts noted that the illegal perpetrators might have been operating from Russia or Eastern Europe but none is yet confirmed as investigations are ongoing.

Commodity charts in Asia show that Brent crude is just one step away from reaching $70.00 a barrel.

The European benchmark recorded a $0.77 increase for the day, sending the price to settle at $69.32 a barrel.

It is up by 1.1% since the start of the week and analysts noted that there is a big chance that Brent would close the week at the $70.00 threshold.

Meanwhile, the West Texas Intermediate made a more significant lift during the same session after adding $0.80.

The American benchmark is up by 1.4% so far in the week, supported by the overall uncertainty brought by the hacking.

Citizens from Southeast US states have scrambled for crude in the past days following the threat, sending an instantaneous panic buying among citizens.

Representatives from Colonial noted that it will take several more days before operations revert to normal.

US Energy Information Administration’s Weekly Update

Another significant catalyst that propelled prices up is the fall in crude oil stockpiles for last week, as reported by the US Energy Information Administration.

According to the private agency, crude oil stockpiles dropped by 427,000 barrels during the week ending May 7.

Such an update is a notable improvement from the previous weeks, where weekly inventory has always given either a draw or build-up.

According to EIA, global demand has already started regaining steam and is expected to recover further in the remaining months of the year.

The increase in demand will mainly come from North America and Europe, where fast vaccination progress has already taken place.

Similarly, the ongoing supply cut observed by OPEC member states is expected to provide support on prices.