UPDATE 7-Oil slips as Asia pandemic fears counter U.S. pipeline cyberattack
By Jessica Resnick-Ault
NEW YORK, May 10 (Reuters) - Oil fell on Monday, giving up an earlier gain, as the impact of a cyberattack that forced the shutdown of major fuel pipelines in the United States was countered by expectations rising COVID-19 cases in Asia will reduce demand.
Colonial Pipeline said on Sunday its main fuel lines remained offline after the attack that shut the system on Friday, but some smaller lines between terminals and delivery points were operational. nL1N2MW0IO nL1N2MX059
While the attack was initially seen as bullish, it could limit crude demand if refiners on the Gulf Coast cut runs, analysts said.
"We know that COVID concerns in India and throughout Asia will hurt demand expectations," said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Last week, traders' focus had shifted to supportive factors around the U.S. opening. "Now the market will be watching the pipeline story, because there is a concern that refiners will not run as much oil if this pathway to the East Coast does not reopen," he said.
Brent crude LCOc1 was down by 15 cents, or 0.2%, at $68.13 a barrel by 11:32 a.m. ET (1632 GMT). U.S. West Texas Intermediate (WTI) crude CLc1> slipped by 35 cents, or 0.5%, to $64.55. Both benchmarks rose more than 1% last week, their second consecutive weekly gain.
"If the pipelines were to remain out of action for any length of time, this would have far-reaching effects on the oil market not only in the U.S., but also in Europe," said Commerzbank analyst Carsten Fritsch.
"That said, it is currently assumed that the disruption to the pipelines will be resolved in a matter of days, so the impact should be limited."
The White House was working with Colonial to help it to recover. Commerce Secretary Gina Raimondo said the pipeline fix was a top priority. nL1N2MW05X
Marathon Petroleum Corp. MPC.N, a major supplier of fuel to the East Coast, said it was looking into alternative supply arrangements for its customers. nL1N2MX0TX
Brent crude has risen more than 30% this year, supported by supply cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and easing coronavirus movement restrictions in the United States and Europe.
But the worsening pandemic in Asia has weighed. Indian coronavirus infections and deaths held close to record daily highs on Monday. nL1N2MX05R
Colonial Pipeline system maphttps://tmsnrt.rs/33upZXs
CHART: U.S. oil may rise to $66.52nL1N2MX02V
CHART: Brent oil may retest resistance at $69.87nL1N2MX011
(Additional reporting by Alex Lawler in Lodon, Aaron Sheldrick in Tokyo and Florence Tan in Singapore; Editing by Steve Orlofsky, Pravin Char and Barbara Lewis)
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