A rally in gasoline futures lost steam as traders expect there will be enough fuel supply to meet demand after a cyberattack led to the shutdown of the largest US oil-products pipeline. Crude futures reversed gains.

Colonial Pipeline, a supplier of fuels to the eastern US, was forced to halt operations late Friday and said on Sunday that it's still working toward a restart of the key artery that's vital to energy flows across the country.

Gasoline futures earlier surged yesterday as much as 4.2pc to the highest since May 2018. Meanwhile, oil futures slipped as at least one US Gulf Coast refiner cut processing rates with plentiful fuel supply in the region, hurting demand for crude.

It's unclear when the pipeline will fully restart. Some tankers are already being booked to supply fuel from Europe to the US East Coast, and one owner said if the outage persists products could be drawn from as far afield as Asia.

"Everything hinges on duration," said Tom Finlon of Brownsville GTR LLC, a trading and logistics firm based in Houston. "If this lingers, it is going to be a problem. If this takes a week, there will be significantly tighter gasoline in the Northeast and a huge spike in retail prices."

While the pipeline disruption is so far not making huge waves in futures markets, traders say that could change if the issue isn't resolved in short order. A lengthy disruption could prove ill-timed ahead of an impending demand surge with the summer travel rush beginning in the world's largest oil-consuming country.

"It's definitely unprecedented in this scale," Amrita Sen, chief oil analyst at consultant Energy Aspects, said. "I think the pipeline, and just generally everything, should be back up and running in about three to five days, but never say never."

Bloomberg