Gasoline shortages are slowly starting to ease as the Colonial Pipeline is getting back to full speed and we are seeing panic subside. While many stations are still dry, the surge of people with full gas tanks is reducing demand. Cargoes of gasoline from Europe and more supply available because of the waiver of the Jones Act, have allowed the possibility of more gas hitting eastern ports. Valero Energy Corporation, Refiners Marathon Petroleum (MPC.N), and Citgo all received waivers and that, along with the pipeline back up, should allow for a dip in gasoline prices at the pump.

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Argus Media is reporting that Colonial Pipeline is letting shippers change where they send their refined products shipments on the system connecting U.S. Gulf coast refineries with the Atlantic coast, as the company's nominations system has been restored following a cyberattack. When Colonial resumed service last week, it notified shippers it would not allow them to change destinations for barrels sent along the pipeline because the system used to schedule such movements was still offline. This left shippers with no way to redirect barrels to southeastern markets drained by panic buying. Over the weekend, Colonial notified shippers that they can now make nomination changes for all lines on the system.

Yet the risk of cyber-attacks is still a threat and the oil and gas industry will have to pay a lot of money to beef up its defenses from these types of attacks. The incident is also making people wonder why we still have the Jones Act and whether this protectionist law has outlived its usefulness and is a factor in our country paying more than it should for oil and gas.

We will all be paying more for oil and gas as the investment in fossil fuel is drying up. Not only is the U.S. oil and gas industry under attack from the Biden administration, but it is also getting hit with the backlash of COVID 19 and banks pulling back from oil and gas so we are facing a shortage risk in a few years. HFI research pointed to a report by Rystad that showed that the COVID-19 pandemic wiped out almost $300 billion of E&P investment and translated to 6.3 mb/d of production loss by 2025.

This comes at a time when oil and gas are coming back much faster than many people thought and is leaving us short. The International Ener Agency warned earlier this year that global oil demand is expected to grow steadily over the next five years and quickly surge past pre-pandemic levels, a path that could put climate goals out of reach, according to the International Energy Agency. The agency said that while the pandemic will have lasting effects on the world’s oil consumption, governments have to act immediately to set the global energy system on a more sustainable path. Oil demand needs to fall by about 3 million barrels per day below 2019 levels by the middle of the decade to meet the goals of the Paris climate agreement, the report said. But on the current trajectory, consumption is instead set to increase by 3.5 million barrels per day.

Reuters reported today that, "China’s crude oil throughput rose 7.5% in April from the same month a year ago, but remained off the peak seen in the last quarter of 2020 as several state-run oil refineries carried out maintenance amid thin margins and high fuel products stocks. Reuters reported that "The country processed 57.9 million tonnes of crude oil in April, data from the National Bureau of Statistics (NBS) showed on Monday, equivalent to 14.09 million barrels per day (bpd). That compares with 13.1 million bpd in April 2020 but was well below the record level of 14.2 million bpd registered last November. For the first four months of 2021, throughput was 232.1 million tonnes, or 14.12 million bpd, up 14% from a year earlier.

On the downside, there is still concern about the COVID outbreak in Asia. Stay tuned!