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ANS steady above $70
Crude prices plateau for a week before spike on Iran nuclear defiance
Steve Sutherlin Petroleum News
Alaska North Slope crude surfed near to but not below $70 per barrel after a crude price plunge -- precipitated by a shrinking war premium -- spawned a trading week that saw West Texas Intermediate and Brent trading in the mid-$60s.
Following a peace pact between Israel and Iran, announced the previous week, the three benchmarks held to a narrow range for the entire trading week ending July 1.
On July 2, crude futures headed sharply higher. WTI leapt $2.13 to close at $67.58 and Brent leapt $2.00 to close at $69.11. ANS closing price for July 2 was not yet released at Petroleum News press time early July 3.
The crude price bump came on geopolitical heat from Iran's decision to halt cooperation with the United Nations nuclear watchdog, along with further support from a trade deal between the United States and Vietnam seen as a stimulant to business activity -- which would bring stronger demand.
In Asian trade July 3, prices weakened on demand concerns after the U.S. Energy Information Administration reported a jump in inventories.
U.S. commercial crude oil inventories for the week ended June 27 popped by 3.8 million barrels from the previous week to 419 million barrels -- 9% below the five-year average for the time of year, according to EIA data released July 2.
Total motor gasoline inventories also increased, 4.2 million barrels on the week to 232.1 million barrels -- 1% below the five-year average for the season, the EIA said. Distillate fuel inventories decreased by 1.7 million barrels to 103.6 million barrels -- 21% below the five-year average for the time of year.
ANS added 14 cents per barrel July 1 to close at $70.82, as WTI added 34 cents to close at $65.45. Brent fell 50 cents to close at $67.11.
ANS was down just 8 cents June 30 to close at $70.67, with WTI down 41 cents to close at $65.11 and Brent down 16 cents to close at $67.61. Crude prices fell on the day on easing geopolitical risks in the Middle East and the prospect of a new output hike in August from the Organization of the Petroleum Exporting counties and its allies.
OPEC+ sources told Reuters that the cartel would likely boost production by 411,000 barrels per day in August, matching increases for May, June and July. If that happens, OPEC+ will have increased its production by 1.78 million bpd so far in 2025, equivalent to over 1.5% of total global demand.
"I believe this potential supply pressure remains underpriced, leaving crude vulnerable to further weakness," said Ole Hansen, head of commodity strategy at Saxo Bank.
On June 27, ANS fell 13 cents to close at $70.75, but WTI gained 28 cents to close at $65.52 and Brent rose 4 cents to close at $67.77.
ANS gained 28 cents June 26 to close at $70.87, as WTI gained 32 cents to close at $65.24 and Brent rose 5 cents to close at $67.73.
ANS tacked on 10 cents June 25 to close at $70.60, while WTI jumped 55 cents to close at $64.92 and Brent jumped 54 cents to close at $67.68.
ANS gained 22 cents over the week from its close of $70.60 June 25 to $70.82 on July 1.
On July 1, ANS finished at a $5.37 premium over WTI and at a $3.71 premium over Brent.
Risk premium may linger Some risk premium likely will linger for crude prices into third quarter 2025 before the market reverts to fundamentals, UBS said in remarks carried in a Wall Street Journal report July 2. Global oil supply-demand balances portend an oversupplied market, the investment bank said.
UBS called for a surplus of oil in the market growing from 300,000 bpd in 3Q 2025 to 1.8 million bpd in 1Q 2026.
"The incremental driver of oversupply comes from rising OPEC+ output as an unwinding of voluntary quota barrels continues," UBS said.
The bank sees Brent crude in the low to mid $60s per barrel in the near term.
Dallas Fed poll sees slowdown U.S. oil and gas sector activity contracted slightly in second quarter 2025, according to oil and gas executives responding to the Dallas Fed Energy Survey.
The company outlook index was little changed at -6.4, suggesting slight pessimism among firms, the Dallas Fed said in a July 2 release, adding that the outlook uncertainty index increased 4 points to 47.1, indicating elevated uncertainty.
Oil and gas production slipped in the second quarter, according to executives at exploration and production firms answering the survey. The oil production index fell from 5.6 in the first quarter to -8.9 in the second quarter.
On average, respondents see WTI at $68 by year-end. Responses ranged from $50 to $85.
Respondents on average said they expect a WTI price of $72 in two years and $77 five years from now.
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