ANS on the brink

Alaska benchmark crude flirts with the $50s on peace efforts; weak China data

Steve Sutherlin

for Petroleum News

Alaska North Slope crude -- on the worst day of a four-day rout -- fluttered a mere seven cents above the precipice of the $50s Dec. 16, after plunging $1.50 to close at $60.07. West Texas Intermediate plunged $1.55 to close at $55.27, and Brent did enter the $50s, plunging $1.45 to close at $58.92.

The slide took oil prices to lows not seen since 2021, as talks to end Russian hostilities in Ukraine teased the end of U.S. sanctions on Russian oil companies -- cutting geopolitical risk and adding supply.

On the demand side of the picture, soft economic data from China raised fears of lower activity and lower crude consumption.

On Dec. 17, crude futures turned higher as geopolitical tensions rose in the Americas, taking WTI up 67 cents to close at $55.94, and taking Brent up 76 cents to close at $59.68. The ANS closing price on the day was not yet released by the Alaska Dept. of Revenue as Petroleum News went to press Dec. 18. On Dec. 16, ANS closed at a $4.80 premium over WTI, and at a $1.15 premium over Brent.

President Trump called for a "total and complete blockade" of all sanctioned oil tankers in and out of Venezuela, raising the heat on its leader, Nicol- s Maduro.

"Venezuela is completely surrounded by the largest Armada ever assembled in the history of South America," Trump posted on Truth Social Dec. 16, adding that Maduro's regime used oil from "stolen oil fields to finance themselves, drug terrorism, human trafficking, murder, and kidnapping."

Some analysts say that the blockade won't meaningfully impact global crude oil supplies.

"While U.S. actions may inject short-term noise and modest risk premium, they are insufficient on their own to tighten global balances or drive a sustained rally in crude prices," Kpler energy analysts said in a note reported by Reuters.

Europe heated up as well on reports of impending U.S. sanctions on Russia's "shadow fleet" of oil tankers and traders as leverage in Ukraine peace talks.

"Treasury officials signaled actions against opaque networks facilitating Russian exports if Vladimir Putin rejects a ceasefire, building on earlier penalties against producers like Rosneft and Lukoil," Middle East Economy said in a Dec. 18 report.

WTI and Brent were higher in early Asian trade Dec. 18.

Crude inventories fall, gasoline inventories rise

Analysts in a Reuters poll on the average expected a build of 2.1 million barrels.

Distillate stockpiles, which include diesel and heating oil, rose by 1.7 million barrels in the week to 118.5 million barrels,

Total motor gasoline inventories jumped by 4.8 million barrels over the week to 225.6 million barrels -- slightly below the five-year average for the time of year, the EIA said. Distillate fuel inventories, which include diesel and heating oil, increased by 1.7 million barrels over the period to 118.5 million barrels -- 6% below the five-year average for the time of year.

Analysts in the Reuters poll called for a gasoline inventory build of 2.1 million barrels, and for a rise of 1.2 million barrels in distillate fuels.

ANS dropped 68 cents on Dec. 15 to close at $61.57, while WTI dropped 62 cents to close at $56.82, and Brent dropped 75 cents to close at $60.37.

On Dec. 12, ANS fell 40 cents to close at $62.25, WTI and Brent each fell 16 cents to close at $57.44 and $61.12 respectively.

ANS dove 81 cents Dec.11 to close at $62.65, as WTI dove 86 cents to close at $57.60, and Brent dove 93 cents to close at $61.28.

Crude made modest gains Dec.10, taking ANS 30 cents higher to close at $63.46, as WTI added 21 cents to close at $58.46, and Brent added 27 cents to close at $62.21.

ANS slid $3.09 over the trading week from its close of $63.16 Dec. 9 to its close of $60.07 Dec. 16.