U.S. gas prices hit the highest levels in seven years Tuesday as the impact from last week's cyber attack on the Colonial Pipeline continues to echo through domestic energy markets.
The AAA said average pump prices hit $2.99 cents per gallon across the United States this week, the highest since late 2014 and a six cent increase from last week following the Colonial Pipeline disruption.
Colonial, which delivers around 45% of all refined fuels along the eastern U.S. coast between Texas and New York Harbor, said it continues to make progress in restoring its network to full capacity following last week's ransomware attack believed to have come from a Russia-based criminal group known as DarkSide.
“This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally. Areas including Mississippi, Tennessee and the east coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week,” said Jeanette McGee, AAA spokesperson. “These states may see prices increase three to seven cents this week.”
GasBuddy.com's Patrick de Haan noted the gasoline demand surged more than 40% in five states -- Georiga, Florida, South Carolina, North Carolina and Virginia -- partly as a result of media reports that suggested near-term shortfalls in gasoline deliveries.
The AAA said current domestic gas supplies should meet current demand, and cover backlogs that develop while the Colonial Pipeline remains offline, but noted that it may take between 15 to 18 days for fuel flows to return to normal levels once the system is back up-and-running.
In global crude markets, prices retreated amid the broader stock market sell-off and questions over the pace of energy demand in India, the world's third-largest market, which remains gripped by a surge in new coronavirus infections.
WTI futures contracts for June delivery were marked 79 cents lower at $64.13 per barrel while Brent contracts for July, the global benchmark, eased 78 cents to $67.55 per barrel.