As if there needed to be another factor to fan the flames of volatility in crude oil trading.
Ever since the unprecedented negative value of oil last year, the unrefined fossil fuel which is often considered a legacy product, out of favor with the modern world which chastises the emissions which result from burning it as fuel and the damage done by exploration and excavation in order to discover and extract it, has surprisingly swung from being in extreme demand to low demand.
Whilst the political chattering and the proponency of sustainable, low-emissions energy sources have both increased and anyone under the age of 30 regards the internal combustion engine as a post-Victorian relic as they look with surprise at advertisements for property which state that the heating system is oil or gas fired, immediately assuming that such a home would require a full renovation to extract itself from the linoleum-covered, Formica-clad 1970s time warp.
The now popular view that anything which runs on oil-based products is akin to steam trains would surely cause oil to devalue once again to zero, or even less than zero, surely.
Not at all. The climate clamour is the preserve of lower populated Western nations, and North America which has the technology, finance and resources to implement a fully sustainable environment for its population.
The rest of the world is still absolutely dependent on the black stuff, and whilst South Asia has been consuming more than it had done last year, causing demand to increase and prices to rise last week, this week a new circumstance has hit the supply chain.
Yes, believe it or not, even analog, industrial legacy infrastructure can be hacked.
Whilst the United States is doing its best to get away from the use of fossil fuels, it is a process, and as a highly industrialized nation with over 350 million residents, any effect on its supply of oil is enough to make the prices go sky high.
During the night, hackers managed to conduct a cyberattack on the systems which operate the Colonial Pipeline, the largest supply network of oil in the United States.
Refined oil products, particulary gasoline (petroleum) have rocketed in price, signaling the imminent rise in the trading price of crude oil.
$3 per gallon at the pumps could well be a reality during the course of today, and what is interesting is that Brent Crude went down yesterday from $68.36 to $67.70 per barrel, which is a reasonable drop that may well fly back up again due to the cyber hack.
Considering that Brent Crude has gone up by an astonishing 258% since this time last year, it is no longer an old fashioned physical product with an old fashioned stagnant price. It's an old fashioned physical product which keeps falling in and out of favor and with which the West has a love/hate relationship, and love/hate relationships create supply and demand peaks, which in turn create volatility!
The 5,500-mile pipeline was shut down on Saturday after its Colonial Pipeline confirmed that it had been the subject of a cyberattack. The incident involved ransomware, but the company did not give out further details or say when they would reopen the pipeline, which carries almost half of the East Coast's fuel supply.
One particular analyst in New York said "A prolonged shutdown (5 days or longer) is likely to send gasoline prices higher, which already trade close to a 7-year high".
If it has been possible for ransomware attackers to wreak havoc of this nature, it may well be worth looking out for the hemp-wearing climate brigade should they get any ideas. The resultant volatility from that would likely be more abrupt than those wanting to be paid to stop hacking.