Trading position (short-term; my opinion; levels for crude oil’s continuous futures contract): Those entering the market now can do so by holding long positions with entry at $63-63.5, with $59.7 as a stop-loss and $68.20 as the initial price target.

The Colonial pipeline has restarted now, after the company, Colonial Pipeline Co., paid a ransom of $5 million in cryptocurrency to hackers. Interesting times we live in, indeed.

Oil Market: Key Updates

• Colonial Pipeline Co. initiated the restart of operations yesterday evening (May 12). It will take several days for the delivery supply chain to return to normal. It is to be noted that Colonial paid nearly $5 million ransom to Eastern European hackers to help restore the fuel pipeline
• Panic hoarding of fuel still continues, leading to gas station outage climbing up. States like Georgia, Virginia, North and South Carolina have more than 50% of gas stations without fuel.

Exposure to such vulnerability in the oil supply chain, along with rising inflation, is eroding investor’s confidence, thus leading to a drop in oil prices by 1.5-2% today (May 13).

Note: Our trading positions remain the same.

Thank you.

Nishant Jain, MBA, CPSM
Oil Trading Strategist