New York — Oil prices turned higher on Monday as a major U.S. fuel pipeline said it could largely restart within the week after a cyberattack forced its shutdown.
Potential U.S. demand growth boosted crude prices, offsetting fears that a resurgent coronavirus pandemic in India and other parts of Asia would hit demand there.
Colonial Pipeline, the largest fuel pipeline in the United States, said on Monday it expects to “substantially” restore operational service by the end of the week.
The system was shut by a cyberattack on Friday, and by Sunday some minor conduits had been reopened while the main lines remained shut.
Last week, traders’ focus had shifted to supportive factors around the U.S. opening. “Now the market will be watching the pipeline story,” said Phil Flynn, a senior analyst at Price Futures Group in Chicago.
Brent crude was up 9 cents, or 0.1%, at $68.37 a barrel by 1:13 p.m. ET (1813 GMT). U.S. West Texas Intermediate (WTI) crude CLc1> rose 10 cents, or 0.1%, to $65.00. Both benchmarks rose more than 1% last week, their second consecutive weekly gain.
“If the pipelines were to remain out of action for any length of time, this would have far-reaching effects on the oil market not only in the U.S., but also in Europe,” said Commerzbank analyst Carsten Fritsch.
“That said, it is currently assumed that the disruption to the pipelines will be resolved in a matter of days, so the impact should be limited.”
The White House was working with Colonial to help it to recover. Commerce Secretary Gina Raimondo said the pipeline fix was a top priority.
A top White House national security official said the U.S. intelligence community is working to determine whether the hackers of the Colonial Pipeline have ties to the Russian government.
Anne Neuberger, deputy national security adviser for cyber, told reporters at a White House briefing that the FBI has been tracking the ransomware group DarkSide since at least last October. A news release issued in the name of DarkSide said its goal was to make money and not create problems for society.
Brent crude has risen more than 30% this year, supported by supply cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and easing coronavirus movement restrictions in the United States and Europe.
But the worsening pandemic in Asia has weighed. Indian coronavirus infections and deaths held close to record daily highs on Monday.
Additional reporting by Alex Lawler in Lodon, Aaron Sheldrick in Tokyo and Florence Tan in Singapore; Editing by Steve Orlofsky, Pravin Char, Barbara Lewis and David Gregorio
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