Betting On How the Colonial Pipeline Hack Affects Gas Prices

By in Industry Insight on
6 Minute Read

Back on May 7, Colonial Pipeline announced that it had been hacked. As a result, the company decided to shut down all four of its major pipelines across the East and Southeast United States as a precaution. A hacking group known as DarkSide took credit for the ransomware attack, which eventually caused a temporary gas shortage across much of the US this week.

On Thursday, we learned that Colonial actually decided to pay the $5 million ransom to DarkSide in order to regain control of their operations. Law enforcement groups have long said that companies should refuse to pay what amounts to digital extortion fees, but Colonial’s importance to the American infrastructure surely played a role in the company’s decision to fork over the cash.

The company announced earlier this week that it was finally able to restart operations on Wednesday, but not before some in the eastern part of the country decided to try and desperately hoard gasoline. People in North Carolina, Virginia, South Carolina, and Georgia flocked to local gas stations after hearing about the potential fuel shortage.

As is usually the case whenever a major news story breaks, you can actually wager on the developments at various betting sites. MyBookie for example, is offering you the chance to bet on certain props related to the Colonial Pipeline hacking story. Let’s take a look and try to find some betting value here.

MyBookie CTA

When Will Colonial Pipeline Be Announced As Fully Operational?

  • Before May 15 (-140)
  • After May 15 (+100)

As mentioned, Colonial announced back on Wednesday, May 12, that it was able to resume operations after the attack shut things down for several days. The company was forced to take several of its systems offline on the day of the attack last week, which helped spurn panic over the potential gas shortage.

When Colonial first announced the attack, the company said that it,

“proactively took certain systems offline to contain the threat, which has temporarily halted all pipeline operations, and affected some of our IT systems.”

Colonial is responsible for nearly half of the fuel supplied to the East Coast, so this was no small thing. The pipeline itself runs all the way from Texas to New Jersey.

After announcing the restart of operations, the company said the full process would still take several days in order to become fully operational. The timing was hugely important for reasons beyond the ability of individuals to gas up their cars. Had the shutdown lasted longer, mass transit systems may have been forced to grind to a halt, while air travel may have had to follow suit. Had the shutdown lasted at least 10 days, planes at the Atlanta airport, for example, would not have enough fuel to fly.

Considering May 15 is Saturday, you’re essentially wagering on whether Colonial’s entire system will be back online by the end of Friday. It’s possible, of course, but the value here lies in betting on the pipeline returning to full operation after May 15 at +100.

Colonial Pipeline Is Fully Operational –After May 15 (+100)

Will National Gas Price Average Be Above $3.50 by June 4?

  • Yes (-160)
  • No (+120)

You don’t have to be an economist to understand supply and demand. Once supply runs short, demand grows. With many believing there could be a national gas shortage if the pipeline remained dormant for an extended period of time, demand for fuel exploded earlier this week. That led to long lines at the pumps all over the Eastern part of the country.

A frustrating thing for consumers is that a shortage that leads to an explosion in demand also leads to a rise in the price for said product. Earlier this week, the national average for a gallon of gas topped $3 for the first time in over six years.

Some in the industry say the national average was always going to top $3 at some point this year, but the process was likely accelerated by the Colonial attack.

The national average had risen 2 cents from Tuesday to Wednesday of this week, and 7.5 cents from a week ago. The last time the national average price for a gallon of gas was this high was the latter half of 2014. Back in June of that year, gas prices shot up all the way to $3.68 per gallon on average across the US.

Gas prices were always going to rise as more and more Americans started to resume normal life after the pandemic slowed things considerably in that regard over the past year. More people are returning to work and going on vacation, which naturally leads to more demand for gas.

While the rise in gas prices was expected, it’s hard to imagine it ever reaches $3.50 a gallon on average at any point this year. GasBuddy, which keeps track of these kinds of things, told MarketWatch earlier this week that it expects the rise above $3 per gallon to be a brief one, with national averages more likely to dip into the high-$2 range later this year.

The odds here seem out of wack. We just barely topped $3 per gallon earlier this week, and hitting $3.50 within the next few weeks seems rather unlikely. Bet against this happening at the favorable +120 odds.

National Gas Price Avg. Be Above $3.50 by 6/4 –No (+120)

Will Gas Prices in New York Top $4 per Gallon in 2021?

  • Yes (+200)
  • No (-400)

New York is one of the states that has been affected by the Colonial hack. However, gas prices in the Empire State aren’t much higher than the national average right now. Triple-A says the average price for a gallon of gas in New York is sitting at $3.04. While that’s a rise of 8 cents over where it was last week and 15 cents more than it was a month ago, the price hike has more to do with the aforementioned return to normal than the attack on the pipeline.

New Yorkers were paying about $2.16 for a gallon of gas a year ago at this time. While some gas stations in harder-hit states, including Virginia, have gouged prices all the way up to $7 per gallon in some instances, New York is unlikely to be affected quite as much by the potential shortage. Plus, the fact that the pipeline has already restarted normal operations should prevent any further issues.

Of Course, It’s Always Possible We’ll See Another Similar Attempt Made on a Major Pipeline

The DarkSide hackers received $5 million for their efforts, and they’re unlikely to ever see the inside of an American courthouse considering they reportedly operate in Russia. It’s certainly not impossible that other similar actors may be emboldened by the development and try to get in on the action, which could feasibly lead to another gas shortage or infrastructure crisis in the US at some point relatively soon.

Hopefully, though, that won’t be the case. While gas prices are rising in New York, they’re still not as high as they are in California, where some motorists are having to pay as much as $6 a gallon in Los Angeles. The average price for a gallon of gas has already topped $4 in the Golden State, but New York still has quite a way to go in order to reach that milestone.

While reaching $4 per gallon in New York may seem unlikely given the odds, the fact that it wouldn’t exactly be unheard of makes “yes” an appealing bet here at +200. If you’re in New York, collecting your winnings from betting “yes” at these odds will hopefully help you offset the cost of gas in your state later this year. The +200 odds are worth a flier.

Gas Prices in NY Top $4 per Gallon in 2021 –Yes (+200)
Taylor Smith

Taylor Smith has been a staff writer with since early 2017. Taylor is primarily a sports writer, though he will occasionally dabble in other things like politics and entertainment betting. His primary specialties are writing about the NBA, Major League Baseball, NFL and domestic and international soccer. Fringe sports like golf and horse racing aren’t exactly his cup of tea, bu ...

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