Did Putin Miscalculate? Weekly EAI Petroleum Report -- March 2, 2022

Did Putin miscalculate? Did the rest of us miscalculate? Some random observations:

• in the big scheme of things, Russia has only two "things" that generate income: a) oil and natural gas sales; b) military hardware (planes, missiles, technology, and mechanized, armored vehicles); 
• of the two, oil and natural gas might be more important
  
• 2022 will be the year the global economy surges, coming out of Covid-19;
• pretty much evenly divided among analysts whether supply will keep up with demand;
• regardless of which school is correct, even if supply keeps up with demand, it will be close;
• asking if "supply will keep up with demand" is the wrong question; of course, supply will keep up with demand ... at what price? That's the better question.
• folks, including Putin, felt that Europe was so dependent on Russian oil, that Russia could get away with serious show of military force;
• the meme a week or so ago was that "no other country" could make up for lack of Russian natural gas or oil;
• that meme is starting to change: maybe the world can get along without Russian natural gas and/or crude oil; again, it's all about the price;
• folks were upset that initial sanctions did not include SWIFT and still do not include natural gas and crude oil;
• SWIFT is now among the sanctions
• no one thought with natural gas so critical for Europe that the continent would actually shut down the Nord Stream 2 pipeline; not only is the pipeline shut down, but project backers ready to seek bankruptcy protection; 
  
• even without formal sanctions, many western countries / companies are saying "no" to Russian oil / natural gas; Russia will find new markets?
• if Russia was unable to "win" Afghanistan after a decade fighting that war, will Russia be able to "win" Ukraine? And if Russia does win, what will Ukraine look like?
• although Russia military will eventually come out on top, that doesn't mean, Russia will "control" the population; economy of Ukraine could become a drag on Russia; a Pyrrhic victory of historic proportions?
• the reason for the huge spike in oil price so quickly? Much of it has to do with type of oil Russia was able to provide. 

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Weekly EIA Petroleum Report

The numbers:

• US crude oil inventories stand at 413.4 million bbls;
• US crude oil inventories decreased by a modest 2.6 million bbls from the previous week;
• US crude oil imports averaged 5.8 million bopd last week, decreasing by 1.1 million bopd from the previous week; over the past four weeks, crude oil imports have averaged 6.2 million bopd, 9.4% more, than the same four-week period last year;
• US refiners are operating at 87.7% of their operable capacity; almost no change over several months;
• distillate inventories decreased again; this time decreased by 0.6 million bbls; inventories stand at 16% below the five-year average;
• jet fuel supplied: increased by 24.5% over same four-week period last year