Oil gains after cyber attack forces shutdown of US fuel pipelines

Oil has risen 33% this year due to supply cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and easing coronavirus movement restrictions in the US and Europe.

Oil rose on Monday after major US fuel pipeline operator Colonial Pipeline had to shut fuel pipelines due to a cyber attack, raising concerns about supply disruption and pump price increases.

West Texas Intermediate (WTI) crude CLc1> rose by 46 cents, or 0.7%, at $65.36. (Reuters file photo. Representative image)

Colonial Pipeline said on Sunday its main fuel lines remained offline after the attack that shut the system on Friday, but some smaller lines between terminals and delivery points were now operational.

"The Colonial Pipeline hack headlines over the weekend have lifted oil prices," said Jeffrey Halley, analyst at brokerage OANDA. "Colonial aside, oil may be vulnerable to some abrupt long-covering sell-offs as the week progresses."

Brent crude was up by 31 cents, or 0.5%, at $68.59 a barrel by 0820 GMT. U.S. West Texas Intermediate (WTI) crude CLc1> rose by 46 cents, or 0.7%, at $65.36. Both benchmarks rose more than 1% last week, their second consecutive weekly gain.

"The major takeaway is the bad guys are very adept at finding new ways to penetrate infrastructure," Andrew Lipow, president of Lipow Oil Associates told Reuters. "Infrastructure has not developed defences that can offset all the different ways that malware can infect one's system."

Oil has risen 33% this year due to supply cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and easing coronavirus movement restrictions in the US and Europe.

While some analysts have said oil demand may never reach pre-pandemic levels, Goldman Sachs said it expected this by the end of the year and predicted Brent would hit $80 and WTI $77 within six months.