US fuel crisis eases as pipeline returns to normal after hack

Widespread gasoline shortages along the US East Coast began to ease  slightly on Saturday as the operator of the nation's biggest fuel  pipeline said it was back to delivering  "millions of gallons per hour"  following last week's cyberattack.

Ships and trucks were deployed  to fill up storage tanks after the six-day Colonial Pipeline shutdown,  the most disruptive cyberattack on record, triggered widespread panic  buying that left filling stations across the US Southeast dry.

"We  have returned the system to normal operations, delivering millions of  gallons per hour to the markets we serve," said the company, which had  begun gradual restart of the pipeline on Wednesday.

More than  13,400 gas stations surveyed in the east and south by fuel tracking app  GasBuddy were experiencing outages on Saturday, down from 16,200 early  the previous day.

On Saturday evening, about 75 per cent of gas  stations in Washington, DC were still without fuel, an improvement from  Friday's figure of 88 per cent, the app showed. Shortages also eased in  North Carolina and Virginia, but were about the same in Georgia.

US  gasoline demand dropped 12.6 per cent from the previous week, probably  due to an easing of  "crazed" panic buying just after the pipeline shut,  said Patrick De Haan, head of petroleum analysis at GasBuddy.

The nationwide average for a gallon of regular unleaded was $3.04 on Saturday, from $2.96 a week ago, according to AAA.

The  pipeline outage accelerated increases in gasoline prices that were   "already rising due to higher crude prices and demand ahead of Memorial  Day," said AAA spokeswoman Ellen Edmonds.

She was referring to the May 31 holiday that traditionally kicks off the US summer driving season. Places  served by the pipeline saw the biggest price jumps this week - with  Georgia and the Carolinas up 20 cents per gallon or more - but they  should also see prices decline again as supplies improve, Edmonds said.

Florence, South Carolina had the nation's biggest price increase at 30 cents, while prices rose 9 cents in DC.

Ships  deployed under emergency waivers were also moving fuel from US Gulf  Coast refiners to the northeast, while 18-wheel tanker trunks were  ferrying gasoline from Alabama to Virginia, helping to stem the  shortages.

US crude prices could edge higher as refiners process  more oil to catch up from the gasoline storage that was drawn down while  the pipeline was shuttered, said Robert Yawger, analyst at Mizuho  Securities.

The approach of Memorial Day helps make  "the sense of urgency supersized" for refiners, Yawger added.

In  Washington, DC, Dennis Li was stuck on Friday at a Sunoco gas station  that was out of fuel. He had tried to find gas at four stations during  the day, with no luck.

"I'm running on empty to the point where I don't want to drive anymore," said Li, who is from Annapolis, Maryland.

The  hacking group blamed for the attack, DarkSide, said it had hacked four  other companies including a Toshiba subsidiary in Germany.

Colonial  Pipeline has not determined how the initial breach occurred, a  spokeswoman said this week. The 5,500-mile (8,900-km) pipeline carries  100m gallons of gasoline, diesel and jet fuel each day to East Coast  markets from Texas refineries.

Colonial has not revealed how much  money the hackers were seeking or whether it paid. Bloomberg News and  the New York Times said it paid nearly $5m.

Colonial said it would resume on Monday its regular nomination process, in which shippers seek space on the line.

It  released a revised schedule to shippers, with estimated delivery dates.  The schedule suggested that diesel loaded in Atlanta on Friday would  arrive at the northernmost point in Linden, New Jersey, 10 days later,  as would gasoline.

Steve Boyd, a senior managing director at fuel  delivery firm Sun Coast Resources, estimated that with gasoline moving  on the pipeline at half Colonial's normal speed, it could take 12 to 20  days for new deliveries from Gulf Coast refineries to reach Linden.

Sun Coast has 75 trucks taking supplies from terminals in Alabama and Georgia to retailers as far away as Virginia."If customers need us for another week or three weeks, we'll be there," said Boyd.