ANS cruises high $90s
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Trading volatile - Hormuz shutdown defangs record IEA reserves release
Steve Sutherlin Petroleum News
Alaska North Slope crude made a pass into the upper $90s March 9, jumping $3.41 to close at $95.47 per barrel. West Texas leapt $3.87 on the day to close at $94.77 and Brent leapt $6.27 to close at $98.96.
That jump came on the heels of sizzling price moves as Iran continued to attack neighboring countries in the region with missile and drone attacks, while declaring the vital trade route through the Strait of Hormuz to be closed to shipping.
On the preceding Friday, March 6, ANS vaulted $12.36 to close at $94.08. WTI vaulted $9.89 to close at $90.90 and Brent leapt $7.28 to close at $92.69.
But as March 10 rolled around, crude fell sharply as world leaders considered releasing emergency crude supplies, accelerating lower after a now-deleted post by U.S. Secretary of Energy Chris Wright on X erroneously stated that the U.S. Navy had escorted a tanker through the Strait of Hormuz. ANS dropped $3.41 to close at $92.06, as WTI slumped $11.32 to close at $83.45 and Brent crumbled $11.16 to close at $87.80.
The deleted post sent WTI plunging 19% at on e point, The Wall Street Journal reported, adding that in the 10-minute span when Wright- s post appeared, an exchange-traded fund linked to oil futures lost $84 million of its market capitalization.
That's an unforgivable error right there Robert Yawger, commodity specialist at Mizuho Securities. - Where- s the line between fantasy and reality? It- s hard to say.-
Oil made its downward move after an afternoon phone interview with CBS News March 9 in which President Trump said the U.S. war with Iran could almost be over.
- I think the war is very complete, pretty much,- the president said, - (Iran has) no navy, no communications, they- ve got no air force. Their missiles are down to a scatter. Their drones are being blown up all over the place, including their manufacturing of drones.-
- If you look, they have nothing left. There- s nothing left in a military sense,- Mr. Trump said.
Crude futures turned higher March 11 after attacks on several commercial vessels off Iran- s coast. WTI gained 4.55% to close at $87.25, and Brent gained 4.76% to close at $91.98, despite a jump in U.S. inventories.
U.S. commercial crude oil inventories for the week ended March 6 rose by 3.8 million barrels from the previous week to 443.1 million barrels - 2% below the five-year average for the time of year, according to data released by the U.S. Energy information Administration March 11.
Total motor gasoline inventories decreased by 3.7 million barrels on the week to 249.5 million barrels - 5% above the five-year average for this time of year, the EIA said. Distillate fuel inventories decreased by 1.3 million barrels to 119.4 million barrels - 2% below the five-year average for the season.
On the evening of March 11, Energy Secretary Chris Wright announced that the U.S. would release 172 million barrels of crude oil from the Strategic Petroleum Reserve as part of a broader release of 400 million barrels by members of the International Energy Agency - the largest such release in history.
- IEA members hold emergency stockpiles of over 1.2 billion barrels, with a further 600 million barrels of industry stocks held under government obligation,- the IEA said in a March 11 release. - The coordinated stock release is the sixth in the history of the IEA, which was created in 1974. Previous collective actions were taken in 1991, 2005, 2011, and twice in 2022.-
Oil futures vaulted higher late March 11 in Asian trade despite the release of reserves, taking Brent above $100 prior to slipping back under the $100 mark before Petroleum News went to press Mar. 12.
On March 5, ANS gained $2.77 to close at $81.72, WTI vaulted $6.35 to close at $81.01 and Brent jumped $4.01 to close at $85.41.
ANS edged up 25 cents March 4 to close at $78.95, while WTI ticked up 10 cents to close at $74.66. Brent was unchanged at $81.40.
ANS rocketed $13.36 higher over the trading week from its March 3 close of $78.70 to its close of $92.06 March 10.
On March 10, ANS closed at an $8.61 premium over WTI and at a $4.26 premium over Brent.
Pipeline offers partial solution Saudi Aramco will bypass the Strait of Hormuz with a pipeline to export a portion of its oil.
A pipeline to move oil from the kingdoms oil fields to the Red Sea in the west is days away from hitting full capacity, said Amin Nasser, CEO of the Saudi Arabian Oil Co., Barron- s reported.
Aramco- s East-West pipeline won't restore all the Saudi oil shipments. It can only export some 5 million barrels per day of crude some 70% of the 7 million barrels Aramco normally exports per day.
Tanker ships are unwilling to traverse the Strait of Hormuz, a route that in peacetime carries upward of 17 million barrels of oil a day from the Middle East to Asia and Europe, including most of the Saudi production. The Saudi pipeline and a few others in the region can reroute some of that product.
Nasser, on Aramco- s fourth-quarter earnings call March 10, said the war in Iran is the biggest crisis for oil markets in history and that there would be catastrophic consequences for the worlds oil markets the longer the disruption goes on.
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