Good afternoon everyone!
Well, just as we were getting used to gas prices, a group of hackers by the name “DarkSide” had to mess it up for all of us.
If you have not been following, here is the synopsis of what is happening in the gasoline world.
Colonial Pipeline is a 5,550 mile long gasoline pipeline stretching from the Gulf Coast to New Jersey. This pipeline supplies over 45% of the East Coast’s gas, diesel and jet fuel. (It’s a BIG deal)
On Friday, the entire pipeline was froze after the pipelines software system had over 100 gigabytes of data stolen from it in a ransomware attack. The hackers asked for an unknown sum of cash in exchange for the data they had stolen. To be clear, the hackers did not shut down the pipeline, the pipeline leadership shut it down in fear of what the hackers were capable to do with it. The pipeline remains shutdown and the Fed has declared a state of emergency for 17 states and DC.
While this has not caused a drastic increase in gas prices yet, it did send gas futures to a 3 year high almost immediately. We will keep you up to date with gas prices and the reopening of the pipeline.
Mortgage backed securities are in a vulnerable position facing increase inflation concerns with a lot of room to the downside. We are holding a locking bias.