The big news this week was the hacking of the Colonial Pipeline in South Eastern USA. The ransomware attack shut down the largest distribution pipeline causing massive panic buying fueled by constant media reports and disinformation. I shook my head as gas stations all over the East Coast started to run out of fuel. In addition, the misinformation caused panic buying in states that are not even supplied by Colonial. Down in southern Florida, stations started to run out of fuel and even in Wisconsin, lines formed at the pump to panic buy based on fears of price spikes and supply problems. The truth is that there was never any spike in cash price markets in the Gulf Coast or New York Harbor. In fact, a gallon of base price gasoline continued to trade at a CHEAPER rate than the Chicago market! Go figure… So the media hype of the week made a potential supply problem into a disaster that could have been avoided with accurate reporting. Colonial has reported that they were operating on “outdated Microsoft Windows” and decided to pay $5M in ransom for their information to be returned. The information that was stolen contained which companies owned what products and the volumes there of throughout the entire pipeline. Therefore, the information was very valuable. Crude oil prices traded up this week on the news of the pipeline hack, along with Israel/Palestine conflict, and potential increased demand outweighing the disaster in India. This week was a perfect example showing how the media can affect commodity prices and unfortunately business/consumers outside of the Colonial issue paid the price.
In local news, cost of product continues to slowly tick higher. Retail prices of both gasoline and diesel are holding near $3/gallon and I don’t expect to see much relief until possibly after Memorial Day.
Propane prices also continue to be stubbornly higher than normal. Although our country experienced a nice rebuilding in national inventory this week, prices continue to hold firm with crude’s movement and high rates of exports. I’m not quite sure we are going to see much lower prices until possibly later into end of summer or early fall based on inventory levels and potential corn drying demand.
As always, if you have any questions, please feel free to give us a call.