Markets for Alaska’s oil are gradually improving. North Slope crude oil sold on west coast markets for an estimated $31.90 per barrel on Tuesday, May 18. That was 44 cents a barrel down from the previous day but a big improvement over recent prices at $10 per barrel or below.

The price estimates are published by the Alaska Department of Revenue.

This is still well short of the estimated $50 per barrel-plus price range needed to get North Slope companies to resume work on new project and it’s still unknown if the price improvement will stick given a huge slug of Saudi oil now headed toward the U.S. in tankers, including to west coast refineries who also buy Alaska oil.

The uptick is encouraging enough, however, that Alyeska Pipeline Service Co. has increased crude oil volumes being moved through the Trans Alaska Pipeline System, an Alyeska spokeswoman confirmed Wednesday.

TAPS “throughput” had been throttled down to 85 percent of normal, a reduction of 75,000 barrels per day, in a measure taken to slow inventory buildup in storage tanks at the Valdez Marine Terminal. But as of last Friday the throughput was increased by 10,000 barrels per day to 95 percent of the 500,000 barrels per day normally moved through TAPS.

“We made a proration adjustment to 95 percent. It’s part of continually reviewing the (demand) numbers to get back to where we want to be, which is moving every barrel the North Slope wants to move,” said Michelle Egan, Alyeska’s spokeswoman.

Brigham McCown, Alyeska’s president, confirmed improvements crude oil inventory and supply chain distribution in a separate statement,.

The reduction, known as a pro-ration, was divided equally among four North Slope entry points to the pipeline where crude oil is delivered from producing fields.

Alaska Department of Revenue data showed TAPS throughput at 449,786 barrels on May 18. A few says earlier, on May 14, throughput had dipped to 425,255 barrels.

Crude oil stored in storage tanks at Valdez was at 4.49 million barrels on May 15, leaving a margin of 1.6 million barrels from the 6.6 million barrels of “working capacity” in 14 storage tanks at the terminal. Alyeska always leaves a reserve capacity available in the tanks in case there are upsets in pipeline or terminal operations.

The pipeline company began reducing throughput at the end of April after forecasting a buildup of crude oil inventory at Valdez in late May. The amount of oil stored is watched closely because if the tanks fill up the pipeline will have to temporarily halt operations,.

Despite the slow improvement in west coast fuel demand one North Slope producer, ConocoPhillips, has not changed a plan announced recently for a 100,000 barrels per day voluntary reduction of production beginning in late May and extending through June, company spokeswoman Natalie Lowman told Alaska reporters.

Those reductions will come from two fields on the slope where ConocoPhillips is operator and owns majority interest, the Kuparuk River and Alpine fields.

Lowman said production in each of the fields will be reduced to the minimum needed to keep oil and gas processing plants operating. “We are planning on ramping down production from the Colville River Unit (which includes the Alpine field) to approximately 25,000 barrels per day, down from about 55,000 to 60,000 barrels per day , and 35,000 barrels per day from the Kuparuk River Unit, down from about 100,000 barrels per day,” she said.

By doing that, oil production can be efficiently ramped up when the decision is made to do that.

ConocoPhillips is also a major producer in the Prudhoe Bay field, the largest on the slope, but under operating agreements cannot reduce its production at that field without participation by BP and ExxonMobil, the two other major owners at Prudhoe.

While there is some improvement in west coast demand Alaska producers are cautious because the crude oil inventories there are still high, with oil in storage reported at less than five million barrels of available capacity.

Meanwhile, Alyeska has the capability to ramp down TAPS throughput if the need arises. Engineering studies show the pipeline can operate as currently configured down to 300,000 b/d and with modification down to as low as 200,000 barrels per day.

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