Reuters Reuters energy columnist John Kemp described the current energy situation as “biggest shock since 1970s,”
“Petroleum inventories were depleting at an unsustainable rate even before Russia’s invasion of Ukraine and the disruption of Russia’s petroleum exports in response … Inventories are now 99 million barrels (8%) below the pre-pandemic five-year seasonal average for 2015-2019 and at the lowest seasonally for seven years .. Gasoline stocks are close to normal but stocks of crude are 51 million barrels (11%) and distillate stocks are 30 million barrels (21%) below the pre-pandemic five-year seasonal average…The combination of sluggish growth in production, rapid growth in consumption and now sanctions has created the classic conditions for a spike in prices … The most remarkable thing is not how high prices are at the moment but that they have not already spiked much higher. In real terms, Brent prices are the highest since September 2014, but they are still only in the 85th percentile for all months since 1990.”