Cyberattack lifts oil; metals shine on demand hope

OIL prices climbed on May 10 after a vital US pipeline was put out of action by a cyberattack, while iron ore and copper hit historic peaks on demand optimism as economies reopen.

Oil rose after the weekend attack hit the Colonial Pipeline Company, the largest in the US and which ships petro and jet fuel from the state of Texas to the East Coast region, serving 50 million consumers.

The US government declared a regional emergency on May 9, while the company was unable to say when operations would return to normal.

In reaction, New York’s West Texas International (WTI) crude and London Brent oil both gained about 0.4 per cent in value on May 10.

“Energy markets were unnerved by a cyberattack on a major US pipeline operator,” said Interactive Investor analyst Richard Hunter.

“As a result, the oil price added to the gains which were already being seen on higher anticipated demand.”

The attack comes as prices were pushing higher in response to an expected jump in demand as the world economy gets back on track as a result of the easing Covid health crisis.

Both Brent and WTI crude have gained more than 30 per cent in value since the start of the year on burgeoning optimism over a post-Covid demand recovery.

Commodities also charged higher on May 10 in part owing to dollar weakness, which makes raw materials priced in the currency cheaper for buyers using rival units.

“Commodities are powering higher on Monday [May 10], supported not only by the weaker US dollar but also by reopening optimism and hope of largescale infrastructure spending in both US and China,” said Oanda analyst Sophie Griffiths.

“China’s benchmark iron ore rallied … to a record high, and copper also reached a fresh record high.”

Elsewhere, Europe’s main stock markets wavered as investors mulled a mixed Asian session, despite another recordbreaking New York performance.

Frankfurt and Paris stocks each declined 0.2 per cent in early afternoon deals, while London advanced 0.2 per cent heading towards midday.

Asian investors struggled to maintain momentum after an early rally on May 10.

Tokyo, Shanghai, Seoul, Manila, Mumbai, Bangkok, Jakarta and Phnom Penh all rose but Hong Kong, Singapore, Wellington and Taipei dropped.

Sydney closed at a record, with mining firms rallying on the back of a surge in iron ore futures to all-time highs above $220 a tonne, thanks to a boost in demand as economies reopen, particularly China.

BHP shares piled on more than three per cent and Rio Tinto more than four per cent, while Fortescue soared nearly eight per cent. Copper also hit an all-time peak at $10,747.50 per tonne – having already hit records last week.

Before the weekend, New York stocks jumped as a well-belowforecast US jobs report eased inflation concerns.

The Dow and S&P 500 finished at all-time highs, and the Nasdaq gained nearly one per cent, while the dollar was under pressure.

The British pound climbed on May 10 to $1.4089, the highest since February 25, on dollar weakness and relief over last week’s UK elections.