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Winter chill ups ANS
ANS starts strong in 2025 on heating fuel demand and supply concerns
Steve Sutherlin Petroleum News
Alaska North Slope crude notched a 13-week high Jan. 3 as cold temper-atures portended a boost in heating oil demand, before sliding Jan. 8 on an unexpected jump in U.S. fuel inventories and a rising dollar.
ANS dropped 94 cents Jan. 8 to close at $74.63 per barrel, while West Texas Intermediate dropped 93 cents to close at $73.32 and Brent dropped $1.08 to close at $76.16.
(See chart in the online issue PDF)
On Jan. 7, ANS jumped 92 cents to close at $75.57, besting its last two closes over $75 -- when it closed at $75.15 Jan. 3 and at $75.05 Oct. 9. WTI added 69 cents Jan 7 to close at $74.25 and Brent jumped 94 cents to close at $77.24.
Even with the dip Jan. 8., ANS -- at $74.63 -- posted a gain of $1.20 over its Dec. 31 close of $73.43.
Crude prices began 2025 with a third consecutive week of gains as con-cerns over supply disruption and frigid winter weather overcame broader economic worries. Prices had flirted with 3-year lows in early Decem-ber.
Traders see constricted supply from Russia and Iran on the horizon.
The outgoing U.S. administration has announced plans to crack down on tankers carrying Russian crude priced above the $60 per barrel level im-posed by U.S. and European allies.
The incoming administration plans to enforce restrictions on Iranian ex-ports, potentially removing up to 1 million barrels per day of sales -- some 1% of global supply.
"The oil market is still grappling with opposite forces -- seasonal de-mand to support the bulls and macro data that supports a stronger U.S. dollar in the medium term ... that can put a ceiling to prevent the bulls from advancing further," OANDA senior market analyst Kelvin Wong was quoted in a Reuters report.
JPMorgan analysts called for January crude demand to jump by 1.4 mil-lion barrels per day year-on-year to 101.4 million bpd, citing "increased use of heating fuels in the Northern Hemisphere."
U.S. commercial crude oil inventories for the week ending Jan. 3 fell by 1.0 million barrels from the previous week to 414.6 million barrels, 6% below the 5-year average for the time of year, the Energy Information Administration said in its weekly report issued Jan. 8.
On average, analysts answering a survey conducted by S&P Global Commodity Insights expected an increase of 100,000 barrels in commer-cial crude inventories for the week.
Total motor gasoline inventories surged by 6.3 million barrels for the pe-riod, while distillate fuel inventories jumped by 6.1 million barrels, the EIA said.
The scale of the increases was a bearish surprise. Analysts in the S&P poll had forecast a build of 2.7 million barrels for gasoline and 2.3 mil-lion barrels for distillates.
ANS slid 49 cents Jan. 6 to close at $74.65, as WTI slid 40 cents to close at $73.56 and Brent shed 21 cents to close at $76.30.
On Jan. 3, ANS rose 70 cents to close at $75.15, WTI rose 83 cents to close at $73.96 and Brent rose 65 cents to close at $76.51.
Jan. 2 was a strong up day, seeing ANS jump $1.01 to close at $74.44, while WTI leapt $1.41 to close at $73.13 and Brent leapt $1.22 to close at $75.86.
Record energy and resource investment seen Investment in the supply of energy and natural resources is on track to hit record levels in 2025, with spend exceeding $1.5 trillion -- up 6% in real terms on 2024, Wood Mackenzie analysts said in the Edge Jan. 8.
The headline figure is for capital investment in upstream oil and gas, metals and mining, and across power and renewables (excluding wires), the analysts said, adding, "Upstream oil and gas spend is expected to rise 3% to $550 billion, the highest since 2018 as financing constraints ease."
The WoodMac analysts expect a volatile year ahead for oil, gas and met-als prices.
"OPEC+ faces another testing year," they said. "The strategy to support price has worked well, but holding Brent above $80 per barrel for the fourth year in a row in 2025 looks very challenging."
They said the ongoing resilience of non-Organization of the Petroleum Exporting Countries supply has left OPEC+ holding 6 million bpd of crude supply off the market.
"We don't expect much of a window for more OPEC+ oil again in 2025 and forecast that Brent will slip to an average of $70 to $75 per barrel," they said. "As we have predicted, it may be several years before OPEC+ can get production back closer to its usual levels of spare capacity."
If the Trump administration imposes 60% tariffs on China and 10% on the rest of the world early in 2025 and partial retaliation by major trade partners occurs, global oil demand in 2025 could be 0.5 million bpd lower -- wiping out half a year's growth, they said.
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