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ANS stages comeback
Crude rises as Ukraine maintains pressure on Russia's oil infrastructure
Steve Sutherlin Petroleum News
Alaska North Slope crude stalled but held its altitude Oct. 7 as crude markets were essentially unchanged in a stasis between demand fears and supply glut concerns. ANS literally was unchanged, moving 0.00 cents on the day to close at $67.46 per barrel -- identical to the day before. West Texas Intermediate rose 4 cents to close at $61.73 and Brent fell 2 cents to close at $65.45.
Oil futures continued higher on Oct. 8 as WTI rose 1.3% to close at $62.55, and Brent gained 1.2% to close at $66.25. The Oct. 8 ANS closing price was not yet released by the Alaska Dept. of Revenue as Petroleum News went to press early on Oct. 9.
Ukraine's successful strikes on Russian oil infrastructure heightened the geopolitical risk premium, offsetting concerns about oversupply in the market.
Signs OPEC tapped out "So far, the talk of an oil glut is not showing up in the numbers," Phil Flynn of the Price Futures Group said in a note as reported by the Wall Street Journal. "We have signs that OPEC might be getting close to being tapped out against a backdrop of ongoing risk to supply as the Russia-Ukraine war drags out."
Crude prices rose Oct. 8 despite the report of a large build in U.S. crude inventories released by the U.S. Energy Information Administration the same day.
Futures eased in Asian trading Oct. 9 as an announced cease-fire between Israel and Hamas was revealed, lowering perceived geopolitical risk in the Middle East, but prices recovered later in the session.
President Donald Trump said Israel and Hamas had agreed on the first phase of a Gaza peace plan which included a temporary halt in combat, hostage releases, and phased Israeli troop withdrawals.
Israeli Prime Minister Benjamin Netanyahu said he planned to convene the government on Oct. 9 to ratify the ceasefire agreement.
The agreement marks a significant turning point that may have far-reaching impacts on global oil markets, according to Claudio Galimberti, Rystad Energy chief economist.
A key implication is the possible reduction of Houthi attacks in the Red Sea, Galimberti said in an email to invezz.
The agreement, he said, could boost chances of a nuclear deal with Iran, potentially leading to Iran expanding crude oil and product exports, significantly altering the supply-demand dynamics and pricing in the international oil market.
"Yet, the devil is always in the details, and I would avoid speculating right now due to the many false starts that we have witnessed in the past," Galimberti said.
ANS was riding an updraft when it stabilized on Oct. 6; the Alaskan benchmark was up 96 cents, while WTI jumped 81 cents to close at $61.69, and Brent jumped 94 cents to close at $65.47.
Crude prices advanced after the Organization of the Petroleum Exporting Countries and its allies agreed Oct. 5 to a 137,000 barrel per day increase in crude production targets starting in November -- less than market expectations of a potential 500,000 bpd boost.
OPEC+ plans to boost production by a further 1.66 million bpd to fully reverse a 2.2 million bpd production cut instituted in early 2024.
ANS rose 54 cents Oct. 3 to $66.50, WTI rose 40 cents to close at $60.88, and Brent rose 42 cents to close at $64.53.
Oct. 2 was the lowest price point of the trading week for ANS -- off $1.08 to close at $65.96, as WTI plunged $1.30 to close at $60.48, and Brent plunged $1.24 to close at $64.11.
On Oct. 1, ANS fell 83 cents to close at $67.03, while WTI fell 59 cents to close at $61.78, and Brent plummeted $1.67 to close at $65.35.
Over the trading week ANS shed just 40 cents from $67.86 Sept. 30, to the close of $67.46 Oct. 7.
On Oct. 7, ANS closed at a premium of $5.73 over WTI and at as premium of $2.01 over Brent.
U.S. inventories surge Crude futures shrugged off a surprise build in oil supplies to advance on Oct. 8.
U.S. commercial crude oil inventories for the week ended Oct. 3 jumped by 3.7 million barrels from the previous week to 420.3 million barrels -- 4% below the five-year average for the time of year, the EIA said in its weekly petroleum report.
Analysts surveyed in a Reuters poll had on the average predicted a 1.9-million-barrel build in crude inventories.
Gasoline and distillate levels fell, however.
Total motor gasoline inventories were drawn down by 1.6 million barrels over the week to 219.1 million barrels -- 1% below the five-year average for the season, the EIA said.
Distillate fuel inventories dropped by 2.0 million barrels over the period to 121.6 million barrels -- 6% below the five-year average for the time of year.
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