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ANS cuts above $70
Iran-related Middle East tensions, China agreement fuel crude rally
Steve Sutherlin Petroleum News
West Texas Intermediate crude skyrocketed $3.17 June 11 to close at $68.15 per barrel, while Brent vaulted $2.90 to close at $69.77, surging as Middle East tensions intensified due to the geopolitical situation involving Iran.
The Alaska North Slope crude price for June 11 - which is estimated by the Alaska Department of Revenue - was not yet released as Petroleum News went to press early June 12.
Crude slid on June 10, taking ANS down 39 cents to close at $70.35 - maintaining a toehold for a third consecutive day above $70, which it touched last for a single day April 22 with a close of $70.35 on April 22. WTI was down 31 cents to close at $64.98 and Brent edged 17 cents lower to close at $66.87.
On June 10, ANS closed at a $5.37 premium over WTI and a $3.48 premium over Brent.
ANS - having consistently traded at a premium over WTI and Brent of late - likely closed above the two benchmarks on June 11, to maintain its perch above the $70 level for a fourth day.
Middle East geopolitical heat added rocket fuel to a host of other bullish factors for crude June 11.
The U.S. administration said it had achieved an agreement with China on tariffs and other trade issues, easing fears that tariffs might impede the economies of both nations and cool demand for crude.
On the supply side, a cease-fire in the Russia/Ukraine war continued to be elusive, threatening Russian crude production and adding more heat to the global geopolitical setting.
U.S. commercial crude inventories staged a bullish drawdown, according to U.S. Energy Information Administration data released in its June 11 report.
U.S. inventories fell 3.6 million barrels over the week ended June 6 to 432.4 million barrels - 8% below the five-year average for the time of year, the EIA said.
Total U.S. motor gasoline inventories jumped by 1.5 million barrels to 229.8 million barrels - 2% below the five-year average for the time of year, the EIA said. Distillate fuel inventories increased by 1.2 million barrels for the period to 108.9 million barrels - 17% below the five-year average for the time of year.
The start of the U.S. summer driving season also added support for crude.
Markets in stasis June 10 June 10 trading in crude and other financial assets such as U.S. equities was muted as markets awaited the outcome of U.S./China trade talks.
Crude prices faded at the June 10 close, erasing an early rally supported by renewed optimism over the outcome of the trade talks coupled with a reduction in Saudi crude shipments to China.
Reuters reported that Saudi Aramco plans to ship some 47 million barrels of crude to China in July - down 1 million barrels versus June volumes. The allocation suggests that the gradual easing of production cuts from the Organization of the Petroleum Exporting Countries and its allies may not significantly increase supply.
On June 9, ANS rose 53 cents to close at $70.74, WTI rose 71 cents to close at $65.29 and Brent rose 57 cents to close at $67.04.
June 9 crude prices were strengthened by weakening of the dollar against other currencies. A weaker dollar makes dollar-denominated crude more affordable for buyers that must convert other currencies to buy it.
ANS leapt $1.23 June 6 to close at $70.21, as WTI leapt $1.21 to close at $64.58 and Brent jumped $1.13 to close at $66.47.
ANS gained 70 cents June 5 to close at $68.98, while WTI rose 52 cents to close at $63.37 and Brent rose 48 cents to close at $65.34.
WTI and Brent prices trended lower in Asia trading June 12 as Petroleum News went to press.
Price war costly for Saudis An all-out crude price war would be costly for Saudi Arabia, the Wall Street Journal said in a June 12 report.
OPEC+ will return more than 2 million barrels per day to the market by late 2025 if the cartel continues to unwind production cuts at its current rate, the Journal said.
Based on Goldman Sachs estimates, the supply boost could flood markets with some 1 million barrels per day above needs in 2025 and 1.5 million barrels too many in 2026.
Lower oil prices can put high-cost competitors out of business, favoring low-cost producers. Saudi Arabia can break even on a barrel of crude even if prices fall to around $35, according to estimates from Rystad Energy.
Falling crude prices are already squeezing the Saudis.
Saudi government oil revenue dropped 18% in the first quarter of 2025 compared with a year ago, the Journal said. Meanwhile, non-oil revenue increased just 2%.
Goldman Sachs said that if Brent averages $62 in 2025, Saudi- s budget deficit could be more than double what the kingdom has penciled in.
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