ANS hits upper $60s

Massive 6.9-million-barrel U.S. inventory drawdown lifts crude Oct. 29

Steve Sutherlin

for Petroleum News

Alaska North Slope crude plummeted $1.07 on Oct. 28 but made a stand in the upper half of the $60s to close at $65.90 per barrel.

Brent, however, moved to the lower half of the bracket, sliding $1.22 to close at $64.40.

West Texas Intermediate avoided the $50s, ceding $1.16 to close at $60.15.

On Oct. 29, crude futures turned higher as U.S. commercial inventories were drawn down far beyond the expectations of analysts. Brent rose 52 cents to close at $64.92, and WTI gained 33 cents to close at $60.48.

ANS prices for Oct. 29 had not yet been released by the Alaska Department of Revenue as Petroleum News went to press early morning Oct. 30.

U.S. commercial crude inventories for the week ending Oct. 24 posted a whopping 6.9-million-barrel drop from the week prior to 416.0 million barrels -- 6% below the five-year average for the time of year, according to U.S. Energy information Administration data released Oct. 29.

Commercial crude stocks were expected to fall by 200,000 barrels to 422.6 million barrels in the week ended Oct. 24, according to the average estimate of eight analysts and traders surveyed by The Wall Street Journal.

The responding analysts were split on the direction for oil, four predicted an increase and four expected a drop, giving estimates ranging from a build of 2.6 million barrels to a 3.6-million-barrel draw, according to MarketWatch.

Total motor gasoline inventories decreased by 5.9 million barrels over the week to 210.7 million barrels -- 3% below the five-year average for the season, the EIA said.

Gasoline inventories were expected by analysts in the WSJ poll to be down by 1.8 million barrels, with forecasts ranging from a decline of 279,000 barrels to a drop of 3 million barrels.

Distillate fuel inventories decreased by 3.4 million barrels over the week to 112.2 million barrels -- 8% below the five-year average for the time of year, according to the EIA.

Distillate fuels levels were seen falling by 1.5 million barrels to 114.1 million barrels in the WSJ poll. Estimates ranged from a 710,000-barrel increase to a 3-million-barrel fall.

Total commercial petroleum inventories decreased by 15.9 million barrels for the period, the EIA said.

ANS fell 12 cents Oct. 27 to close at $66.97, as WTI fell 19 cents to close at $61.31, and Brent dropped 32 cents to close at $65.62.

On Oct. 24, ANS fell 16 cents to close at $67.09, WTI dropped 29 cents to close at $61.50, and Brent slipped 5 cents to close at $65.94.

Sanctions on Russian oil boost prices

ANS crude leapt $2.26 Oct. 23 to close at $67.25, while WTI vaulted $3.29 to close at $61.79, and Brent surged $3.40 to close at $65.99.

The sanctions -- targeting two of Russia's major oil producers -- may constrict funds for Russia's hostilities on Ukraine, while altering the landscape for global energy trading, according to a MarketWatch report.

"The sanctions will reshape energy flows and global trade," Nigel Green, deVere Group CEO, said in a note Oct. 23. "We can expect Russia to deepen ties with non-Western buyers such as China and India, which could redraw pricing structures and long-term supply routes. It's an immediate geopolitical and economic realignment."

"When a major global supplier faces restrictions, price and supply dynamics shift overnight," he said. "We expect a period of short-term turbulence across oil, equities and currencies as some investors reposition."

On Oct. 22, ANS jumped $1.65 to close at $64.99, WTI rose 68 cents to close at $58.50, and Brent jumped $1.27 to close at $62.59.

ANS surged $2.55 over the trading week from a close of $63.35 Oct. 21 to a close of $65.90 Oct. 28.

On Oct. 28, ANS closed at a premium of $5.75 over WTI and at a premium of $1.50 over Brent.