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ANS crosses $76 mark
Feb. high short lived on Russia/Ukraine peace bid and US inventory jump
Steve Sutherlin Petroleum News
Alaska North Slope crude -- after a three-day run -- notched its highest high in more than two weeks Feb. 11, up 83 cents to close at $76.11 per barrel. West Texas Intermediate jumped $1.00 to close at $73.32 in the day and Brent jumped $1.13 to close at $77.00.
The Alaska benchmark had closed at $76.20 Jan. 24, after having taken its only foray into the $80s during 2025 on Jan 15, closing at $80.42.
The indexes, however, abruptly snapped a three-day winning streak Feb. 12, seeing ANS plunge $1.79 to close at $74.32, as WTI plummeted $1.95 to close at $71.37 and Brent plunged $1.82 to close at $75.18.
A potential deal for Russia/Ukraine peace, U.S. inventory builds and inflation data combined to ice crude prices Feb. 12.
U.S. President Donald Trump said that Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy in separate phone calls had signaled openness to negotiate a peace treaty, whereupon Trump ordered U.S. officials into talks on ending the Ukraine war.
Trump acknowledged the peace effort on Truth Social, adding, "I believe this effort will lead to a successful conclusion, hopefully soon!"
Trump said he and Putin were planning reciprocal state visits.
A ceasefire, or end of the war, could be bearish for crude if Trump cancels sanctions on Russian energy, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch.
Geopolitical stability may "largely extinguish the still simmering 'fear bid' in the oil market," Richey said.
There's more to the story than meets the eye, said Manish Raj, managing director at Velandera Energy Partners told MarketWatch.
"The immediate effect of a peace deal is that Russian barrels stranded at sea can find a home," Raj said.
US inventories jump U.S. commercial crude oil inventories for the week ending Feb. 7 -- excluding Strategic Petroleum Reserve levels -- jumped 4.1 million barrels from the previous week to 427.9 million barrels -- 4% below the five-year average for the season, the U.S. Energy Information Administration said in its weekly petroleum report issued Feb. 12.
The inventory build was not a surprise. An analyst survey conducted by S&P Global Commodity Insights called for a build of 4.5 million barrels on average.
Total motor gasoline inventories data were bullish, showing a drawdown of 3.0 million barrels for the period to 248.1 million barrels -- 1% shy of the five-year average for the time of year, the EIA said. Distillate fuel inventories increased by 0.1 million barrels.
The S&P survey forecast an inventory increase of 1.3 million barrels for gasoline and a decline of 1.6 million barrels for distillates.
Inflation keeps rate in check The U.S. Federal Reserve will keep its current benchmark interest rates steady for now.
Fed Chair Jerome Powell said Feb. 11 that the economy is in a good place and that the Fed won't cut interest rates further but is prepared to do so if the labor market weakens unexpectedly or inflation surprises to the downside.
Consumer Price Index data released Feb. 12 showed a sharp rise in consumer prices in January, further bolstering the Fed's reasoning on holding back rate cuts.
"Higher-for-longer" Fed policy could put recessionary pressure on the economy, retarding demand for petroleum products.
The Organization of the Petroleum Exporting Countries said in its Monthly Oil Market Report released Feb. 12 that it expects global crude demand to grow by 1.4 million barrels per day in 2025 and 2026, unchanged from its January forecast. OPEC expects total world demand to average 105.20 million bpd in 2025 and 106.63 million bpd in 2026.
The combination of the Fed's decision to hold interest rates steady and expectations of fewer interest rate cuts in 2025 support the U.S. dollar, OPEC said.
"Indeed, the U.S. dollar index closed 2024 up by 4.5%, y-o-y, and remained at high levels as of the end of January, up by 5.5%, y-o-y," OPEC said. "The relative strength of the U.S. dollar makes commodities priced in the currency more expensive, and therefore a downside risk to demand."
ANS jumped $1.26 Feb. 10 to close at $75.28, while WTI jumped $1.32 to close at $72.32 and Brent jumped $1.21 to close at $75.87.
On Feb. 7, ANS added 48 cents to close at $74.02, WTI added 39 cents to close at $71.00 and Brent added 37 cents to close at $74.66.
ANS and WTI each fell 42 cents Feb. 6 to close at $73.54, and $70.61 respectively. Brent shed 32 cents to close at $74.29.
From Wednesday to Wednesday, ANS added 36 cents from its Feb. 5 close of $73.96 to its close Feb. 12 of $74.32.
On Feb. 12, ANS traded at a $2.95 premium to WTI, and at an 86-cent discount to Brent.
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