Oil Price: API reports a significant US crude inventory draw - exceeding its own estimate
Amidst mushrooming uncertainties, the API, American Petroleum Institute, reported a significant draw of the US crude inventories during the last week, exceeding its own estimate for the period - 1.167 million barrels.
Analysts hope that the data from the EIA, US Energy Information Administration, will confirm the trend by its own report due to be released on Wednesday.
The sudden escalation of the war between Russia and Ukraine made the energy forecasts by experts up until then, at best completely irrelevant and at worst, a statistical maze that can only make those who follow them leaving in a dizzy spell.
Without credible substitutes, the West dragged the energy sector into the conflict in the hope of expediting the achievement of its political goals at the expense of the collective global economy and experts now do not talk about just the slow growth, but recessions in the major economies.
The GDP forecasts for the Q1 2022 do not make good reading for any decision maker.
The war between Russia and Ukraine is far from over. With the improvement in warmer weather conditions, it is going to get worse with millions of Ukrainian civilians becoming refugees across Europe while undergoing severe hardships - and above all, humiliation with the loss of their own country.
Since the crisis is inextricably linked to the existing energy crunch, even a hypothetical aspiration of an improvement in the supply of fossil fuels is as illusive as a mirage on a long road in hot weather.
As the European nations that heavily rely on Russian gas looking for alternatives in the event of Russian taps going dry, the US is facing the uphill battle of filling up the vacuum; it is easier said than done, though; the latest report by the EIA, US Energy Information Administration, paints a grim picture on the supply front.
The US could not address the grievances of its own citizens, at pump despite the former being technically self-sufficient in its energy needs, being the world's largest oil producer; in this context, it begs the question; how is it going to deal with the needs of the Europeans, when there are plenty of issues in your own backyard?
As far as Europe is concerned, a crack has already appeared in the EU over the banning Russian oil and gas, although they project a united front. Hungary and Slovakia vehemently oppose it on the grounds of their inability to find the alternatives and inevitable logistical issues: even if the US can send in LNG, liquefied natural gas, the distance involved and the cost of transportation do not make it affordable in the long run; the OPEC+ is not going to step in to fill the gap either, as the cartel just looks after its own interests.
Both China and India, along with many Asian nations, meanwhile, keep buying Russian oil and gas and in this context, the sanctions against Russia on energy front make little sense; it does not even lead to a psychological victory, because Russia is still said to be earning millions of dollars in revenue by selling the commodities - every single day.
Of course, the other sanctions against Russia such as the suspension of the SWIFT payment system, are working in favour of the West. The tentacles of energy sector, however, are mired in a win-win situation, not an outright victory for those who talk about sanctions on this front.
In this context, the fissure in the EU over the issue can only get widened when the consumers, who already are trapped in a web of inflationary tentacles, feel an unbearable pinch.
In short, the EU is trapped between a rock and a hard place as far as the fossil fuels are concerned. The fast growing 'green movements' in these countries do not make the lives of decision makes any easier when the latter scratch their heads in seeking solutions.