ANS hugs $70 level
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Oil jumps Feb. 11 as Trump administration mulls Iran tanker seizures
Steve Sutherlin Petroleum News
After making a geopolitically-fueled second run in a trading week to mere pennies below $70, Alaska North Slope crude dipped below $69 per barrel Feb. 10, down 45 cents to close at $68.90. West Texas Intermediate shed 40 cents to close at $63.96 on the day and Brent ticked 24 cents lower to close at $68.80.
Oil trading saw a choppy week as saber rattling in the U.S.-Iran standoff contended with hopes for a peaceful negotiated settlement to the tensions.
On Feb. 11, crude futures surged higher on indications from U.S. officials that the Trump administration had considered seizure of tankers carrying Iranian oil, but held off on concerns of Iranian retaliation, according to a Wall Street Journal report.
"Taking similar action with Iran would be escalatory and would likely see the market needing to price in an even larger risk premium than it already is," ING analysts said.
Brent was up 2.2% in early trading but closed 60 cents or 0.9% higher at $69.40. WTI rose 67 cents to close at $64.63.
Feb. 11 gains were muted by a huge surprise surge in U.S. crude inventories shown in data released by the U.S. Energy Information Administration.
U.S. commercial crude oil inventories for the week ended Feb. 6 -- excluding Strategic Petroleum Reserve levels -- leapt 8.5 million barrels from the previous week to 428.8 million barrels -- 3% below the five-year average for the time of year, the EIA said.
Analysts in a Reuters poll estimated on average that crude inventories rose by some 800,000 barrels on the week.
Total motor gasoline inventories rose 1.2 million barrels over the week to 259.1 million barrels -- 4% above the five-year average for the time of year, the EIA said. Distillate fuel inventories decreased 2.7 million barrels to 124.7 million barrels -- 4% below the five-year average for the season.
Analysts in the Reuters poll estimated that gasoline inventories likely fell by some 1.3 million barrels, while distillate levels likely fell by 400,000 barrels.
ANS rose 88 cents Feb. 9 to close at $69.36, as WTI rose 81 cents to close at $64.36 and Brent rose 99 cents to close at $69.04.
On Feb 6, ANS rose 62 cents to close at $68.48, WTI rose 26 cents to close at $63.55 and Brent rose 50 cents to close at $68.05.
Crude fell sharply Feb. 5, clawing back a chunk of the gains on the previous day. ANS plunged $1.42 to close at $67.86, WTI plunged $1.85 to close at $63.29 and Brent plunged $1.91 to close at $67.55.
ANS leapt $1.35 Feb. 4 to close at $69.28, while WTI leapt $1.93 to close at $65.14 and Brent leapt $2.08 to close at $69.46.
ANS gained 97 cents over the trading week from its close of $67.93 Feb. 3, to $68.90 on Feb. 10.
Russian crude stranded afloat A flotilla of tankers laden with unsold Russian oil are floating at sea, threatening fiscal hurt for Moscow, the Wall Street Journal reported Feb. 11.
Some 143 million barrels were on the water Feb. 10, seeking buyers, according to ship-tracking company Vortexa.
Russia's crude buyers are demanding the deepest discount to global oil prices since early in the Ukraine war.
Despite sanctions after the 2022 invasion of Ukraine, Russia evaded sanctions, rebuilt its own shadow shipping fleet and found new buyers for its crude.
Today, European sanctions against specific ships, military ship seizures on the high seas, and President Trump's efforts to put a wedge between Russia and India, have left Moscow's most important industry in a precarious state, the Journal said.
Russia's main crude grade -- Urals -- trades for some $45, a record $27 below Brent, according to commodities-data firm Argus Media.
Russia needs $59 per barrel to balance its 2026 fiscal budget.
China's teapot refineries, independent outfits that often operate without links to Western finance and insurance, appear to be absorbing some of the glut, according to Natasha Kaneva, head of global commodities strategy at JPMorgan.
But the teapots are likely to drive a hard bargain.
"When oil is sitting on a tanker off the coast, hoping for a buyer, the seller is not in a good negotiating position," said Ronald Smith, founding partner of Texas-based Emerging Markets Oil and Gas Consulting Partners.
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