fundamental News - OIL
WTI oil prices traded higher in the U.S. open after a major U.S. fuel
pipeline said it could largely restart within the week after a
cyberattack forced its shutdown, but closed lower for the fifth days at
New York.
But the worsening pandemic in Asia has weighed. Indian coronavirus
infections and deaths held close to record daily highs on Monday.
Potential U.S. demand growth boosted crude prices, offsetting fears
that a resurgent coronavirus pandemic in India would cut demand in
Asia.
Colonial Pipeline, the largest fuel pipeline in the United States,
said on Monday it expects to "substantially" restore operational service
by the end of the week.
The system was shut by a cyberattack on Friday, and by Sunday some
minor conduits had been reopened while the main lines remained shut.
Last week, traders' focus had shifted to supportive factors around
the U.S. opening. "Now the market will be watching the pipeline story,"
said Phil Flynn, a senior analyst at Price Futures Group in Chicago.
Brent crude settled up 4 cents, or 0.1%, at US$68.32 a barrel. U.S.
West Texas Intermediate (WTI) crude settled up 2 cents, or 0.03% at
$64.92. Both benchmarks rose more than 1% last week, their second
consecutive weekly gain.
"If the pipelines were to remain out of action for any length of
time, this would have far-reaching effects on the oil market not only in
the U.S., but also in Europe," said Commerzbank analyst Carsten
Fritsch.
"That said, it is currently assumed that the disruption to the
pipelines will be resolved in a matter of days, so the impact should be
limited."
The White House was working with Colonial to help it recover.
Commerce Secretary Gina Raimondo said the pipeline fix was a top
priority.
The U.S. government has not received any requests to waive the
Jones Act in response to the pipeline shutdown, a spokesman for the U.S.
Customs and Border Protection said on Monday.
A top White House national security official said the U.S.
intelligence community is working to determine whether the hackers of
the Colonial Pipeline have ties to the Russian government.
Anne Neuberger, deputy national security adviser for cyber, told
reporters at a White House briefing that the FBI has been tracking the
ransomware group DarkSide since at least last October. A news release
issued in the name of DarkSide said its goal was
to make money and not create problems for society.
Brent crude has risen more than 30% this year, supported by supply
cuts by the Organization of the Petroleum Exporting Countries and
allies, known as OPEC+, and easing coronavirus movement restrictions in
the United States and Europe.
Expectation today: bearish