Oil prices rose on Wednesday on the back of news about the largest pipeline system, the Colonial Pipeline – the main source of gasoline, diesel, and aviation fuel supplies to the east coast of the United States. Prices are also supported by a strong demand forecast from OPEC, supported by the released data from the API on the decline in raw materials stocks in the United States.

The price of July futures for Brent crude oil at the time of preparation of this material rose by 0.41% and amounted to $ 68.83 per barrel. The price of June WTI crude oil futures increased by 0.80% to $ 65.80 per barrel.

The 5,500-mile-long Colonial pipeline, which can transport about 3 million barrels of fuel a day, was suspended last Friday due to a hacker attack. It is expected that the operation of the pipeline will be restored only by the end of this week.

The cyberattack on the Colonial Pipeline was allegedly carried out by the hacker group DarkSide, whose roots go back to Russia. The Russian embassy said that Russia was not involved in these cyberattacks, and the Russian government consistently supports a professional dialogue with the United States on international information security issues. Hackers also demand a ransom from the fuel pipeline operator, the amount of which has not yet been made public.

Meanwhile, over the past five days in the eastern regions of the United States, there is already a strong shortage of fuel. Gulf of Mexico oil refiners has resorted to reducing their production due to the inability to deliver a sufficient volume of products to customers. For example, companies in Louisiana and east Texas, whose products are delivered primarily through pipelines, are likely to reduce production by 20% over the next few days. This measure is necessary to maintain the level of stocks in the norm. Some oil refiners have resorted to renting tankers to store excess oil products.

And although the prolonged shutdown of the pipeline seems to favor the prices of black gold, the forced reduction in the capacity utilization of some oil refining companies can significantly affect the quotes of the energy carrier.

According to data from the American Petroleum Institute (API), energy and distillate stocks in the United States declined last week, but gasoline stocks rose. Oil reserves decreased by 2.5 million barrels for the week and distillate reserves - by about 900 thousand barrels. Gasoline stocks increased by 5.6 million barrels. By the way, the reduction in oil reserves was recorded even before the suspension of the Colonial Pipeline.

The Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for global oil demand this year, expecting an annual increase of 5.95 million barrels per day. At the same time, OPEC analysts are generally very optimistic about the situation in India, expecting an increase in fuel consumption in the second half of this year, even despite the surge in the incidence of COVID-19.

Meanwhile, the US Department of Energy forecasts an increase in energy production by 0.4 million barrels per day by the end of 2021. The independent agency EIA expects that US oil production will average 11.3 million barrels per day in the fourth quarter, and in 2022 production will grow to an average level of 11.8 million barrels per day.

According to the EIA, spot prices for Brent crude oil in April were at $ 65 per barrel, at the level of March indicators. The agency expects that in the second quarter, the price of Brent will remain at the same level and will fall to $ 61 per barrel in the second half of this year.