Already high prices hit new records, although east coast was meant to see impact first
The main pipeline carrying gasoline and diesel fuel to the U.S. East Coast was shut down by its operator after being hit with a cyberattack. The attack has been attributed to DarkSide, a group of veteran cybercriminals. Colonial Pipeline Co. operates the Colonial Pipeline system that takes fuel from the refineries of the Gulf Coast to the New York metro area.
The pipeline stretches 5,500-miles, and the company learned Friday that it was the victim of the attack and “took certain systems offline to contain the threat, which has temporarily halted all pipeline operations”, according to the Wall Street Journal.
Although, according to sources, the cyberattack targeted only business related computers and none involved in the system itself, there have been reports that the supply chain would likely be affected and that prices could rise.
Prices are rising, but the West is way out ahead
Indeed, Gasoline futures saw an increase 2% to $2.168 per gallon, and heating oil futures also rose 1.2% to $2.03.
Wst Texas Intermediate crude futures, which is the U.S. oil benchmark, also jumped 56 cents to $65.46 per barrel. International benchmark Brent crude was trading at $68.95 per barrel, for a gain of 65 cents.
Leave it to California, home to the highest consumer gas prices in the nation to move fast to the upside, base on anticipated higher costs, or just to take advantage of the news? Hard to say.
Just recently, in early March, California had the highest price in the nation overall at $3.68 on average.
The station in the photos, in Escondido, California, which is near San Diego, represents a single station and not an average for the State.
However, with premium plus at this station which is branded “V-power” is actually being sold for $5.19 which, if it were an average is likely the highest ever in the US, to date, by a very wide margin.
Jen Psaki, White House spokesperson for the Biden Administration made this statement with regard to the incident:
“As the Administration works to mitigate potential disruptions to supply as a result of the Colonial Pipeline incident, @USDOT is taking action today to allow flexibility for truckers in 17 states”
The effect, if lasting, could put a damper on holiday road trips
Many in the media have been predicting a blockbuster kick-off to the summer travel season with pent up demand, particularly for road trips, set to explode after a long year of lock-downs and Tavel bans. In the west, and particularly California, if gas prices at the pump rise above $5 that prediction could be in doubt.
Of course, if demand drops enough that could mitigate the ability of the industry to continue squeezing the maximum out of every drop. Let’s hope that the price, regardless of how, will drop below $4 in time for road trips and mobility as the weather continues to improve.
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