Alaskan North Slope (ANS) oil prices have plummeted to record lows in recent weeks as US west coast fuel demand wanes during government-imposed travel restrictions to combat the spread of Covid-19 and a price war between Saudi Arabia and Russia continues.
ANS was reported trading today at a record low $10.15/bl discount to CMA Ice Brent for June delivery to the US west coast, down sharply from the previous record low on 13 March at a $2.95/bl discount to Brent. Today's deal reflects the first reported trade of the June trade cycle at the US west coast.
Six deals were reported for May arrival, ranging from a $2.95/bl discount to 30¢/bl under the benchmark, for a calendar month average of $1.24/bl discount to the international benchmark. This compares to an 18¢/bl monthly average discount in the April trade cycle, when 10 deals were reported.
ANS has been forced to compete with Mideast Gulf grades at the US west coast during an oversaturated oil market reeling from coronavirus induced demand erosion.
The Energy Information Agency (EIA) reported today that it could take 18 months for domestic fuel demand to return and that second quarter gasoline consumption could decrease by 25pc over previous estimates.
ANS and other medium sours lend themselves to higher yields of diesel, which could support prices relative to light sweet grades at the US west coast, where refiners are slashing runs and stockpiles of gasoline are increasing.
Refinery runs at the US west coast fell by more than 10pc, or 241,000 b/d, in the week ended 27 March, according to the latest available statistics by the EIA.
