Analysis - Crude Oil Stock Change For March 11

Analysis - Crude Oil Stock Change For March 11

By Yash

The US crude oil stock change saw a positive increase in the previous week. The stocks of crude oil at the major inventory hubs were also more. This is a bit of a relief for the US oil markets that have become very concerned about the overall low inventories of crude oil. The crude oil stock change saw an increase of more than four million barrels in the week ended March 11. The overall figure was 416 million barrels. The figures were reported by the US Energy Information Administration. The figures bode well as experts had predicted a decline of nearly 1.5 million barrels of crude oil. But the production of crude oil in the country has remained unmodified. The overall output in the country is at 11.5 million barrels per day.


The crude oil stock change saw the oil prices going higher after President Joe Biden said that the country would ban the imports of all energy products from Russia. The United Kingdom has also said that it will phase out the oil imports from Russia from the entire nation by this year. But it will continue to permit natural gas imports from the nation. Right now, only a couple of nations have imposed an outright ban on the invading nation. According to experts, the European continent is going the face the overall burn of the present commodity crisis. The Russian crisis looks like an impending energy shock to the world that was last experienced nearly half a century ago. These sanctions mean that if the conflict is drawn out, there will be large implications for the overall energy market in the long term.


Crude Oil Stock Change Has Increased the Retail Fuel Costs


The increase in oil prices has assisted in pushing the retail fuel costs around the planet to a much higher mark. According to the American Automobile Association, gas prices are at a record level in the United States. The cost of diesel in Europe has also seen a major increase. This underlines the inflationary impact of the growing costs of energy. Meanwhile, BP and Shell have said that they will quit Russian oil as part of their efforts to criticize the invading nation for the war. The increase in the prices of the crude oil stock change since the war between Ukraine and Russia has caused several of the big firms on Wall Street to increase their forecasts of the costs of oil. Experts have said that Brent could increase to as high as $180 by the end of this year if the present conditions of the prices of oil continue.


Meanwhile, Goldman Sachs predicted that the prices of Brent might go upward of $146 this year. The prices were at a hundred dollars previously. They said demand destruction is the sole method to buffer the increasing costs. The prices of crude oil are increasing continuously. ConocoPhillips Chief Executive Ryan Lance said that the demand for oil products such as gasoline might decline soon if the prices continue to grow as they have. The volatility of oil is still at the highest level because the crude oil stock change has resulted in negative trading. The benchmarks were trading wildly at more than ten dollars per barrel in the previous week. The head of the IEA has stated that the agency can release more supplies to decrease crude oil prices if that is so required. It also said that it was not happy with the actions taken by producers to stabilize the prices of crude oil so far. 


There is No Capacity to Fill the Crude Oil Stock Change Caused by Sanctions


OPEC Secretary-General Mohammad Barkindo said that the planet does not have the capacity to develop the oil that can make up for the quota of Russia in the crude markets. He made the remarks in Houston at the CERAWeek by S&P Global. At that same event, CEO Mike Wirth of Chevron Corp said there was no significant evidence suggesting shortages of gas or physical oil. Several cracks are starting to happen across the oil markets on the globe as the increasing prices are now hurting both the consumers and the manufacturers. Plastic manufacturers in Asia are decreasing their activities, while the refiners in the region are thinking about cuts to the processing. The rates of freights have also increased. This has added to the growing pressures on refiners that had recently recovered from the coronavirus pandemic.


Diesel is also experiencing some tightness right now. This is particularly true in the continent of Europe. Traders are paying a high price of more than ninety dollars per ton for the ICE Gasoil futures relative to the April contract. These prices are at a level that has never been reached before. The benchmarks of crude oil have also remained very backward-dated. President of Lipow Oil Associates Andrew Lipow said, "Refiners have been able to maintain seasonally high utilization to take advantage of good refining margins and as we continue to export significant quantities of diesel to supply the Russian shortfall." ConocoPhillips Chief Executive Ryan Lance said, "We are getting to the kind of prices today that are encroaching upon the area of demand destruction."


Crude Oil Stock Change: Shell & BP To Stop Purchasing Russian Gas and Oil


BP and Shell have said they will not buy any gas and oil from the invading nation. But they will not be able to cut themselves off right now from Russia because they have long-term contracts. This will make it difficult for them to find alternative supplies in a short time. The announcements are a great about-turn for Shell that marks a response to the global comments regarding its purchase of Russian oil in the previous week. This also increases the rejection of Russia by the energy firms because of its recent invasion of Ukraine. It also underlines the risks of such a move. Shell has said that its refineries might end up creating less fuel than what it is producing right now. The firm will also shut down its lubricant operations, aviation fuels, and service stations in the country.


BP has said that it might have to go back on its promise if the security of its energy supply was limited. In the previous week, Shell had to face criticism for purchasing a cargo of Russian crude oil. Dmytro Klueba, Ukraine's Minister for Foreign Affairs, asked the firm on Twitter whether the crude oil smelled like Ukrainian blood for them. The firm said that eliminating the firms' usage of refined natural gas and oil supplies from the invading nation can take a longer period because it represents a very big challenge, according to a statement issued by the firm. BP was not as emphatic in its statement to phase out energy supplies from Russia. The firm's spokesman said that they would not charter vessels that are flagged, operated, or owned by Russia. But it could get into new businesses with the country if necessary for ensuring the security of supply.


It also said that it "will continue to meet existing contractual obligations subject to meeting sanctions, security, and shipping requirements and where it is safe to do so." Shell said in a statement, "We are acutely aware that our decision to purchase a cargo of Russian crude oil was wrong last week. Our actions to date have been guided by continuous discussions with governments about the need to disentangle society from Russian energy flows." Oilytics founder Keshav Lohiya said, "There is no easy fix to replace these Russian barrels. Reduced refinery runs might be the only solution." 



The war between Ukraine and Russia has led to a wide range of firms withdrawing from their current operations in Russia. This includes Exxon Mobil Corp and BL Plc. The attention has now gone to the energy exports being made by the nation. It is a vital source of revenue for the government of President Vladimir Putin.