US Gasoline Prices Already Shaking... Panic Buying Feared Ahead of Summer Peak Season

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[Asia Economy Reporter Yujin Cho] Gasoline prices in the United States are already shaking as Colonial Pipeline, the largest pipeline operator in the U.S., halted operations due to a hacking attack. With panic buying demand surging ahead of the peak summer vacation season, which is the busiest time of the year, there are forecasts that gasoline prices will soar to the highest level in seven years.

On the 10th (local time), the American Automobile Association (AAA) announced that the price of unleaded gasoline in the U.S. rose sharply by 6 cents per gallon compared to the previous day. Accordingly, the average gasoline price in the U.S. increased from $2.904 per gallon the previous day to $2.967 per gallon. AAA forecasts that if this trend continues and prices rise by another 3 cents, the national average price will reach the highest level since November 2014.

Janet McGee, a spokesperson for AAA, predicted, "Gasoline prices in the East Coast region from Mississippi, Tennessee, and Georgia to Ohio and Delaware are expected to rise by about 3 to 7 cents per gallon early this week."

Oil price analysts expect that as fuel supply has been interrupted for more than three days, the rise in gasoline prices will gradually spread nationwide, starting from major cities in the southeastern U.S.

In particular, concerns are intensifying ahead of the peak summer season starting at the end of this month. The market has already raised worries that gasoline shortages may occur as travel demand for the summer vacation season revives due to the expansion of vaccine distribution.

Tom Kloza, chief analyst at Oil Information Service (OIS) in the U.S., said in an interview with CNN at the end of last month, "There could be a gasoline shortage centered around popular vacation spots in the U.S. this summer," adding, "Sporadic gasoline shortages were already reported during the spring break period in Florida, Arizona, and the northwest region of Missouri."

This forecast was made before the recent pipeline hacking incident, and the gasoline shortage is expected to worsen due to this incident, likely accelerating the timing of the price increase.

Meanwhile, Colonial Pipeline stated, "Some pipelines are being gradually restarted," and "Our goal is to resume a significant portion of operations by the weekend."

Colonial, which was hit by a ransomware attack on the 7th, operates an 8,850 km pipeline transporting about 2.5 million barrels daily of gasoline, diesel, and jet fuel from the Gulf Coast in Texas to eastern New Jersey.

International oil prices remain stable, supported by expectations of a swift normalization. On the New York Mercantile Exchange (NYMEX) on the same day, June delivery West Texas Intermediate (WTI) crude oil rose by only $0.02 compared to the previous day. On the London ICE Futures Exchange, July Brent crude was down 0.10% ($0.07) per barrel as of 5:25 p.m.