On May 7, Colonial Pipeline released a statement informing the nation that it fell victim to a cyberattack. In response, they proactively took their systems offline to contain the threat, which has temporarily halted all pipeline operations. On May 10, states started reporting little to no fuel available at local gas stations.
Tom Brady, PhD, Executive Director of the J.P. Morgan Center for Commodities at the University of Colorado Denver Business School, can discuss the potential impacts on gas prices of the pipeline shutdown.
- If Colonial can fully restart operations over the next few days, there is no anticipation of widespread impacts on the U.S. East Coast due to the fact that many refineries have some gasoline and diesel inventories on hand which are being drawn down.
- If this becomes a longer outage, then we will see some more expensive work arounds, including:
- Having refineries on the east coast increase production
- Supply gasoline and diesel to the East Coast via rail and road transportation
- Receive supplies via ship from Europe
- All of these will result in higher prices faced by consumers just as we are entering the summer driving season in North America
- This outage is adding price pressure to both diesel and gasoline which are climbing as the economy is opening after COVID shutdowns.
- Prompt month gasoline futures prices have climbed over 50% since the end of 2020 to $2.36/gallon, with AAA reporting the average retail price is over $3.00/gallon currently.
Interested in speaking to Tom? Please email Meghan Azralon at email@example.com to schedule.