Oil plummeting as fears of pipeline cuts subside
Some Gulf Coast refineries reduced production due to cuts in the largest oil pipeline system in the US. Oil prices plummeted on Tuesday as fears of the Colonial Pipeline's prolonged cuts subsided.
West Texas Intermediate (WTI) crude oil futures fell 61 cents, or 0.94%, to $ 64.31 a barrel at 0512 GMT after gaining 2 cents on Monday.
Brent crude oil futures fell 56 cents, or 0.82%, to $ 67.76 a barrel after rising 4 cents on Monday.
The ransomware gang accused of crippling the leading US fuel pipeline operator said Monday that it would never cause damage. Pipeline pirates say their goal is cash, not chaos.
It is not specified how much money the hackers running after. The Colonial Pipeline did not comment on the hackers' request, and US officials said they did not participate in ransom negotiations.
The rally in oil prices was short-lived, as the Colonial Pipeline outage does not seem to have a long-term impact.
The US gasoline futures contract and US heating fuel futures, which rose after the cut, retreated to pre-Friday levels.
The Colonial Pipeline, carrying more than 2.5 million barrels (bpd) of gasoline, diesel and jet fuel per day, closed its network on Friday after it was attacked by cyberattacks.
The company said on Monday that it is trying to gradually restart operational service with the goal of substantially restoring operational service by the end of the week. He started running the fuel line manually for a limited time using existing inventories.
Meanwhile, the rapid spread of coronavirus infections in India supports the government's thinking of shutting down the second most populous country in the world.
As for the positive prospect for crude oil, data show that US crude inventories fell by 8 million barrels the previous week, followed by a drop of about 2.3 million barrels in the week of May 7.
Gasoline stocks are expected to have fallen by about 400,000 barrels, it is estimated on average ahead of reports from the American Petroleum Institute industry group on Tuesday and the U.S. Energy Information Administration on Wednesday.
OPEC is also expected to publish its monthly oil market report, which includes April production figures, on Tuesday.
