ANS in consolidation
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ANS up 10.1% YTD, on track for solid Q1 2024; OPEC+ plus cuts supportive
Steve Sutherlin Petroleum News
North Slope crude added 13 cents March 27 to close at $85.62 per barrel, while West Texas Intermediate slid 27 cents to close at $81.35 and Brent slid 16 cents to close at $86.09.
The Alaska benchmark extended its recent consolidation in the mid $80s after trading in a tight $1.19 range over the trading week ending March 27. Wednesday to Wednesday, ANS gained just 7 cents from its March 20 close of $85.55.
On March 27, ANS closed at a $4.27 premium over WTI, and at a 47-cent discount to Brent.
ANS is on track for a solid first quarter, up $7.86 or 10.1% year to date on March 27. WTI and Brent saw YTD gains of 10.74% and 8.39% respectively.
Quarterly gains were supported by supply cuts from the Organization of the Petroleum Exporting Countries and its allied exporting countries including Russia.
WTI and Brent moved slightly higher in Asian trade March 28 as Petroleum News went to press.
U.S. inventories rose, according to the U.S. Energy Information Administration, but traders were cheered that the EIA build was sharply lower than the estimate by the American Petroleum Institute.
U.S. commercial crude oil inventories for the week ending March 22 -- excluding Strategic Petroleum Reserve supplies -- lifted 3.2 million barrels from the previous week to 448.2 million barrels -- 2% below the five-year average for the time of year, the EIA said March 27.
Total motor gasoline inventories increased by 1.3 million barrels for the period to 232.1 million barrels -- 1% below the five-year average for the time of year.
"We ... expect U.S. inventories to rise less than normal in reflection of a global oil market in a slight deficit. This will likely hand support to the Brent crude oil price going forward," Bjarne Schieldrop, SEB Research chief commodities analyst said in a note, according to a March 27 Reuters report.
Prices fell March 26 on the API call for a 9.337 million barrel leap in U.S. crude inventories. ANS fell 61 cents to close at $85.49, WTI fell 33 cents to close at $81.62 and Brent fell 50 cents to close at $86.25.
ANS leapt $1.19 March 25 to close at $86.10, as WTI and Brent gained $1.32 each to close at $81.95 and $86.75 respectively.
Traders were spooked by rising conflict in the Middle East and Ukraine strikes on Russian oil facilities which could contract world crude supplies.
On March 22, ANS slipped 25 cents to close at $84.91, WTI shed 44 cents to close at $80.63 and Brent lost 35 cents to close at $85.43.
ANS dropped 39 cents March 21 to close at $85.17, as WTI slid 61 cents to close at $81.07, and Brent slipped 17 cents to close at $85.78.
$100 crude in September? If Moscow follows through with a plan to cut oil production the price of oil could hit $100 per barrel later this year, J.P. Morgan Global Commodities Research said in a note March 27.
A March 25 Reuters report said that Russia's government ordered companies to slash oil production to a target of 9 million barrels per day by the end of June to keep a pledge made to OPEC+. Russia claimed production of 9.5 million bpd in February.
J.P. Morgan said Russia's move was "surprising," and said it may boost U.S. gasoline prices to $4 a gallon by May.
"Russia's actions could push the Brent oil price to $90 already in April, reach mid-$90 by May and close to $100 by September, keeping pressure on the U.S. administration in the run-up to elections," J.P. Morgan said.
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