ANS hugs 2-week high

Geopolitics, gasoline demand counter big OPEC+ production boost

Steve Sutherlin

Petroleum News

Alaska North Slope crude, along with West Texas Intermediate and Brent, lifted to two-week highs despite a larger than expected production boost from the Organization of the Petroleum Exporting Countries and its allied exporting nations.

On July 5, OPEC+ approved a supply increase of 548,000 barrels per day for August, well above the widely expected increase of 411,000 bpd, which would have matched the cartel's increases for May, June and July.

On Sunday July 6, after months of calm, a Greek-managed Liberian-flagged ship was attacked in the Red Sea by Yemen based Houthi rebels, followed by a second such attack July 7.

On July 7, ANS reacted to the upside -- adding 69 cents to close at $72.96 per barrel -- as WTI jumped 93 cents to close at $67.93 and Brent jumped 78 cents to close at $69.58.

Crude rose again July 8, with ANS up 62 cents to close at $73.59, WTI up 40 cents to close at $68.33 and Brent up 57 cents to close at $70.15.

July 9 trading was subdued as traders considered data showing a lift in U.S. gasoline demand offset with a jump in crude inventories, and renewed attacks on Red Sea shipping by Houthi rebels. WTI added 5 cents on the day to close at $68.38, and Brent added 4 cents to close at $70.19.

UAE Energy Minister Suhail al-Mazrouei said July 9 that oil markets were absorbing OPEC+ production increases without building inventories, which means they are thirsty for more oil.

"You can see that even with the increases for several months we haven't seen a major buildup in inventories, which means the market needed those barrels," he was quoted in a Reuters report.

U.S. commercial crude oil inventories for the week ended July 4 leapt 7.1 million barrels from the previous week to 426 million barrels -- 8% below the five-year average for the time of year, the U.S. Energy Information Administration said in its July 9 petroleum report.

Analysts answering a Reuters poll had on average expected a draw of 2.1 million barrels.

Total motor gasoline inventories fell however, by 2.7 million barrels for the week to 229.5 million barrels -- 1% below the five-year average for the time of year, EIA said, adding that gasoline demand rose 6% to 9.2 million barrels per day over the week.

Distillate fuel inventories decreased by 0.8 million barrels for the period to 102.8 million barrels -- 23% below the five-year average for the season.

Prior to the three-day Fourth of July holiday weekend, traders were cautious heading into the OPEC+ production meeting. ANS slid 21 cents July 3 to close at $72.27, WTI dropped 45 cents to close at $67.00 and Brent fell 31 cents to close at $68.80.

On July 2, geopolitical heat from Iran's decision to halt cooperation with the United Nations nuclear watchdog and a trade deal between the United States and Vietnam juiced prices. ANS gained $1.67 on the day to close at $72.27, while WTI and Brent each leapt $2.00 to close at $67.45 and $69.11 respectively.

ANS gained $2.77 from its close of $70.82 on July 1, to $73.59 on July 8.

On July 8, ANS closed at a $5.26 premium to WTI, and at a $2.77 premium to Brent.

Record travel on holiday week

"AAA is seeing strong demand for road trips and air travel over Independence Day week," AAA Mountain West Group spokesperson Doug Johnson said in a June 23 release. "With the holiday falling on a Friday, travelers have the option of making it a long weekend or taking the entire week to make memories with family and friends."

AAA projected 61.6 million people will travel by car, a 2.2% increase over last year and the highest volume on record.

AAA expects 5.84 million travelers will fly to their destinations -- 8% of all Independence Day travelers, a 1.4% increase over the previous record set last Independence Day week.

According to the Transportation Security Administration, 3,041,954 passengers were screened though TSA checkpoints Sunday July 6. The total exceeded the previous record of 3,013,622 passengers screened in a single day, set Sunday July 7, 2024.

According to a July 2024 TSA release, July 7 was the first time since the TSA was founded in November 2001 that TSA officers screened more than 3 million travelers on a single day at airports across the country.

Other notable 2025 passenger counts occurred on July 7 (2,916,531) and July 3 (2,923,165).