Colonial Pipeline will update federal officials Wednesday on the status of reopening its key East Coast pipeline following a cyberattack as gas prices topped $3 per gallon while gas stations in the Southeast ran out of fuel.
President Biden will also give House lawmakers an update on the cyberattack at 6 p.m. ET Wednesday.
The pipeline, which carries 2.5 million barrels of gasoline up the East Coast daily, has been down since Friday following a ransomware attack. The FBI said the Russian hacking group DarkSide is behind the attack.
Energy Secretary Jennifer Granholm said Tuesday that “it will take a few days to ramp up operations” even if operations are restored Wednesday or Thursday.
Exxon Mobil (XOM), which pumps oil and sells gasoline, rose 1.5% on the stock market today. Among other integrated oil majors, Chevron (CVX) climbed 2.7%, Royal Dutch Shell (RDSA) added 2.6% and BP (BP) rallied 3.3%.
U.S. Gasoline Stockpiles Rise
The Energy Information Administration reported a 400,000-barrel drop in crude oil stockpiles for the week ended May 7. Gasoline stockpiles rose by 400,000 barrels. Analysts polled by S&P Global Platts expected a 4.1 million-barrel drop in crude supplies and a 700,000-barrel increase in gasoline supplies.
However, these figures do not include the impact of the Colonial Pipeline outage. The outage will show up in data from the May 19 report.
Gasoline inventories are 1% lower than seasonal averages, but if the pipeline remains down inventories will reach five-year lows by May 14, according to S&P Global Platts Analytics.
Oil prices rose Wednesday. Brent, which helps set gas prices, was up 1.8% to $69.79 per barrel. U.S. crude climbed 1.9% to $66.50.
Gas Prices Jump
The cyberattack sparked fears of a fuel shortage, and gas stations across the Southeast ran out of gasoline.
Over 70% of gas stations in Raleigh and Charlotte were out of gasoline, 73% of Pensacola, Fla. stations and 8% of Washington stations, according to GasBuddy data.
The pipeline outage also sent gasoline prices higher. U.S. national average retail gas prices rose above $3 a gallon for the first time in nearly seven years, according to AAA data released Wednesday. The average is $3.008 for a gallon of gas, up from $2.927 a week ago. On the futures market, gas prices rose 1.3% to $2.17 a gallon.
Experts warn drivers not to fill up their gas tanks unnecessarily.
If “consumers collectively decide to fill up their gas tanks due to fear of a shortage, it could cause a shortage,” according to Platts Analytics. “For example, if 30 million cars went from 50% full to 90% full, that could be 4 million barrels drawn from service station tanks who would then try to refill from their suppliers. Such panic buying was a factor in the consumer gasoline shortages with the 1973 and 1979 oil crises.”
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