Oil Giants Slump Despite Hope Colonial Pipeline Back Online By Weekend By Investing.com

By Dhirendra Tripathi

Investing.com – Shares of oil giants Chevron (NYSE:CVX), ExxonMobil (NYSE:XOM) and Royal Dutch Shell (NYSE:RDSa) slumped Tuesday even though fears about a prolonged outage of the largest U.S. fuel pipeline system receded.

Chevron and Shell each fell 2%, while Exxon fell nearly 3%. BP (NYSE:BP) traded 2% lower, Marathon Petroleum (NYSE:MPC) fell 2.4% and Occidental Petroleum (NYSE:OXY) fell more than 7%, the last one also owing to it reporting losses Monday for the March quarter.

A disruption to retail supplies would have hiked prices at the pump, a distant eventuality now given that Colonial Pipeline has said it is working on restarting its network with “the goal of substantially restoring operational service by the end of the week”.

Some temporary firmness in fuel prices could still be seen now that a long-term disruption to the Colonial Pipeline can be ruled out.

Colonial’s network transports more than 2.5 million barrels per day of gasoline, diesel and jet fuel from the Gulf to states on the East Coast.

U.S. crude futures Crude Oil WTI Futures fell 0.9% at $64.35 a barrel, while the international benchmark Brent Brent Oil Futures contract fell 0.7% to $67.86.

“Refined product markets do not seem overly concerned about the disruption to the Colonial pipeline, with prices settling only marginally higher yesterday,” said analysts at ING, in a note. “This is still likely to lead to some tightness in gasoline on the East Coast, with inventories in the region currently sitting below the 5-year average. We will likely see increased flows of seaborne cargoes into the East Coast in order to help with this tightness.”