Oil price war recedes: Diplomatic effort may restore Russian output
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Steve Sutherlin for Petroleum News
Crude oil futures finished the day lower Nov. 19 on reports of renewed diplomatic efforts to end Russia's war on Ukraine, raising chances of the return of Russian production slowed by sanctions and attacks on infrastructure.
West Texas Intermediate and Brent each dropped 2.1% on the day to close at $59.44 and $63.51 respectively.
On Nov. 18, Alaska North Slope crude closed at a $5.24 premium over WTI, and at a $1.09 premium over Brent. ANS Nov. 19 pricing was unavailable as Petroleum News went to press Nov. 20.
Brent and WTI recovered from deeper losses seen early on Nov. 19, following the release of data by the U.S. Energy Information Administration showing a surprise drawdown of crude inventories.
Commercial crude oil inventories for the week ended Nov. 14 -- not inclusive of Strategic Petroleum Reserve levels -- sliding 3.4 million barrels to 424.2 million barrels, 5% below the five-year average for the time of year, the EIA said.
Analysts polled by the Wall Street Journal called for crude stocks to have risen by 100,000 barrels.
Oil in the SPR increased 533,000 barrels to 410.9 million barrels.
Motor gasoline levels jumped by 2.3 million barrels to 207.4 million barrels -- 3% below the five-year average for the season, the EIA said. Gasoline demand fell 500,000 barrels per day to 8.5 million bpd.
Analysts in the WSJ poll expected gasoline stocks to be down 100,000 barrels.
Distillate fuel inventories were up 171,000 barrels to 111.1 million barrels -- 7% below the five-year average for the time of year, the EIA said.
Distillate inventories were forecast to have dropped 1.5 million barrels in the WSJ poll.
On Nov. 18, ANS and WTI each rose 83 cents to close at $65.98 and $60.74 respectively. Brent added 69 cents to close at $64.89.
ANS fell 17 cents Nov. 17 to close at $65.15, while WTI fell 18 cents to close at $59.91, and Brent fell 19 cents to close at $64.20.
Nov. 14 saw positive price action with ANS rising 85 cents to close at $65.32, WTI leaping $1.40 to close at $60.09, and Brent leaping $1.38 to close at $64.39.
ANS slipped 35 cents Nov. 13 to close at $64.47, as WTI inched 20 cents lower to close at $58.69, and Brent slipped 30 cents to close at $63.01.
Crude oil took a hit Nov. 12 when the Organization of the Petroleum Exporting Countries revised its production forecast upward but kept its demand forecast unchanged, erasing its earlier projections of a supply deficit in 2026.
ANS plunged $2.06 to close at $64.12 on the day, WTI plummeted $2.55 to close at $58.49, and Brent plummeted $2.45 to close at $62.71.
ANS fell 20 cents over 5 trading days from its close of $66.18 Nov. 11 to a close of $65.96 Nov. 18.
WoodMac: Oil and gas is back Oil and gas returned to the forefront at ADIPEC 2025 in Abu Dhabi Nov. 3-6, as the world's biggest energy conference drew a record crowd of more than 239,000 visitors over its four days, according to Simon Flowers, Wood Mackenzie chairman and chief analyst.
"After a few years of subdued mood, the return of confidence among oil and gas participants was almost palpable," Flowers wrote in the Nov. 13 edition of The Edge. "IOCs and NOCs talked tactically about building resilience into their portfolios in anticipation of price weakness and volatility in the near term."
Flowers said the concerted message from senior executives and ministers was an expectation that oil demand will continue to grow well into the next decade, and perhaps beyond.
"The big implication is that upstream must deliver the required supply to meet sustained oil demand," he said. "Strategically, companies are positioning to invest with the aim of strengthening their oil and gas production profiles for the 2030s."
"Governments in many developed countries have chosen to secure affordable energy over sustainability goals," Flowers wrote Nov. 6 in The Edge.
"It is clear that we cannot quickly swap the current fossil fuel-based energy system for a new, low-carbon one," he said, adding that over the past decade, renewables have jumped from 5% to 20% of global power supply -- barely covering incremental demand growth. "Scaling up low-carbon supply faster than demand growth and building a new, deeply decarbonized, resilient energy system is proving far tougher than envisaged," he said.
-STEVE SUTHERLIn
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