North Slope crude tops $70

Kay Cashman

Petroleum News

On April 1, the closing price for Alaska North Slope crude climbed above $70 for the first time since Nov. 8, 2018, after a nine and a half month run during which ANS crude was in the $70s to mid-$80s.

These were the highest prices seen since 2014 after crude started its multi-year crash below the $100 level, eventually declining to the low $30s for ANS.

On April Fool’s Day, ANS crude jumped $1.46 to $70.27, while Brent crude rose 62 cents to $69.01 and West Texas Intermediate increased $1.45 to $61.59.

ANS crude tends to track close to the international benchmark Brent price.

Analysts credited the price rally to fresh evidence of the Organization of Petroleum Exporting Countries supply cuts and lessening of worries about global economic growth largely based on Chinese manufacturing data.

The cuts came from Saudi Arabia, with OPEC’s output slipping in March for the fourth straight month.

“It’s OPEC, for once sticking to their supply constraints,” Scott Bauer, chief executive officer of Prosper Trading Academy in Chicago, was quoted as saying in a Bloomberg report. “In the past, they haven’t really heeded their own guidance. But this time they are, and it looks like it’s going to stay that way for the foreseeable future.”

A survey by Reuters showed OPEC members pumping 30.4 million barrels a day in March, down 280,000 bpd from February - the lowest OPEC total since 2015.

According to the same Bloomberg report, “China’s manufacturing purchasing managers’ index recorded its biggest increase since 2012” in March, “exceeding all estimates by economists. The news lifted equity markets worldwide, with Hong Kong’s Hang Seng index entering into a bull market.”

- Kay Cashman