Record-Breaking Heat Bakes The South/ System Outages After Cyber-Attack

Energy futures drift lower to start Tuesday’s trading session, lacking any compelling headlines to shift sentiment one way or another so far this morning. The prompt month HO contract, which expires on Friday along with its gasoline counterpart, is the only one of the ‘big three’ benchmarks not trading lower this morning. The American crude oil benchmark is approaching the lower boundary of the trading range its adhered to for the past couple months, and may test the $67 price floor in short order.

The remnants of Tropical Storm Cindy may reorganize in the coming week but current forecasts have it staying out at sea, away from US energy infrastructure.

While its currently all quiet on the Atlantic front, severe weather is still making headlines as thunderstorms continue thrashing the Midwest and record-breaking heat bakes the South. Valero’s Meraux and Shell’s Norco refinery both experienced power outages in the last 72 hours as extreme heat tests power grids all along the Gulf Coast. BP’s Whiting refinery is also recovering from a disruption after storms rolled through the area, knocking out power to several units and causing an unplanned flaring.

Suncor Energy reported various system outages after experiencing a cyber attack over the weekend. The breadth and depth of the damage is unclear but the Canadian refiner assures none of its counterparties’ or employees’ data is at risk. It’s yet to be seen what affect this might have on the refined product markets in Colorado, where Suncor operates the state’s lone refinery. As of right now it seems unlikely, we’ll see the same price blowout experienced back in Q1’23 when the plant was knocked offline due to winter storms.

Of note: it’s been 2 years since hackers pressed pause on the Colonial Pipeline, stopping refined product shipments on the US’s main supply artery. The attack incited panic buying around the nation as some cities along the pipeline’s path reported gas station outages.

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