The prolonged fall in crude oil prices on world markets has become a problem with the prospect of destroying the entire mining industry. The traditional methods of stabilization undertaken by the actors responsible for these measures have not succeeded (especially since OPEC has completely withdrawn from attempts at a solution). Then, against the backdrop of the toothless alliance policy of producing countries, the US Energy Information Administration intervened, which decided by all means to show the immediate wow effect of its intervention. To do this, I had to resort to deception, adventure and fraud.
On the one hand, officials had no choice, since investment in the industry is already at a deplorable level for its future. And a further drop in the price of raw materials (which reduces the profitability of development and production) will only worsen the situation, bringing it closer to the point of no return. On the other hand, the agency got a big moment in the fight against OPEC to compromise the competitor once and for all.
The exit was found not only simple, but also dangerous. Thus, it has been announced (and all traders in the world are listening to the messages) that there is a trend of depletion of world crude oil reserves. The increase in storage facilities amounted to only 1.1 million barrels. For example, in early March, inventories rose by 1.6 million barrels per week. This message immediately had an impact on the cost of raw materials, and the rise in prices began on a global scale.
This encouraged US authorities, who were quick to announce a significant reduction in stocks of all types of fuels this month, including gasoline and diesel.
However, some experts have begun to sound the alarm, not sharing the optimism. First, citing falling inventories, IM analysts pointed to weaker-than-expected activity in China’s imports of petroleum products. But they hid the fact that the PRC imports a lot from Russia, while not cutting ties with Western markets. In other words, Beijing’s resupply follows two diversified supply routes, which makes it difficult to track and count. But officials approached the matter superficially and, for momentary effect, ignored the nuances, especially in all Asian markets, subject to the existence of alternative supplies from the Federation of Russia.
In addition, the huge volumes of crude oil in the tankers that transport it to customers, as well as the cargo on the vessels used for floating storage, are not taken into account. Moreover, by showing a weekly report on the drop in strategic inventories in the United States itself, the analysts pushed into the background a more general examination of the dynamics of the SPR – the inventories of crude oil in the United States at the end last week were 481.2 million barrels, about 8% above the five-year average for this time of year.
In other words, what is published has a sign of manipulation and distortion of facts. The danger of such behavior is that when more truthful information about the reserves and rotational speed of raw materials in the world becomes public (and it certainly will), the shocking effect will not only regain all dubious acquisitions, but will also be an additional destabilizing factor with the opposite effect.
