A hacker group launched a ransomware attack on Colonial Pipeline over the weekend. The attack led to the shutdown of a major oil pipeline.
Here’s what investors are saying about the potential impact on oil and gas prices.
Jim Cramer, host of CNBC’s “Mad Money,” gives his take on what happened.
“We’ve always heard that utilities were vulnerable, and this is a utility to some degree … This is big. I mean, maybe this was a ransomware attack; there’s a lot of what do we know and what do we don’t know going on here. Maybe it was a ransomware attack and they finally wouldn’t pay, and we see a lot of companies pay.”
Matthew Prince, CEO of CloudFlare, sees an alarming increase in the number of hacks and cyberattacks.
“You know I think it’s actually a real concern right now that we’re seeing across the board more and more critical infrastructure being targeted by these sorts of attackers. I think what’s going on anecdotally is that attackers think that their time may be coming to an end with, around the world, governments thinking of cracking down more and more on these cybersecurity incidents, and so they seem to be unleashing everything. And so in the last six months, we’ve seen a dramatic uptick in attacks against our customers. I’m fortunate now to be on the floor of the New York Stock Exchange, which is one of CloudFlare’s customers and obviously a critical piece of infrastructure. And we’re doing everything we can, we’re working around the clock to make sure that our customers stay safe from what is an unparalleled amount of cyber activity going on in the world right now.”
Patrick De Haan, GasBuddy analyst, says investors are still trying to gauge how long the outage could last.
“Given the fact that this is a complete outage of one of the nation’s most critical pipelines that serves these areas — and I think that’s highlighted by the fact that there’s really been no news, even well-placed sources I’ve talked to have really nothing to say — and so the market really has no idea if this could be online tomorrow, if it’s going to be three days. It’s hard to know if Colonial or the authorities in this issue even have a feeling for when this could be resolved themselves, so I think you’re seeing the market respond very cautiously, not knowing if this could extend into five, seven, 10, 14 days.
Tom Kloza, global head of energy analysis at OPIS, discusses how seasonality could impact the oil market.
“May tends to be a month where gasoline prices can peak in the futures market, and once it was apparent that Colonial had a handle on this and that they might substantially restore operations by the weekend, things calmed down. I might also add that we’ve had three weeks in a row where we averaged over 7 million barrels every week in imports, so there’s plenty of gasoline in the North Atlantic to supply a lot of the deepwater ports on the East Coast.”
