Crude Jumps Over $2 on Major U.S. Inventory Draw, Global Supply Shifts
WTI nears $96 as EIA reports an 8-million-barrel weekly stock decline, while Bakken differential holds steady.
U.S. crude oil prices surged more than two percent on Wednesday, propelled by a massive drawdown in national inventories and ongoing global supply diversification efforts in the wake of Middle Eastern disruptions. West Texas Intermediate (WTI) crude was trading at $95.85 per barrel, up $2.09, while the international benchmark Brent crude rose $1.93 to $97.93, according to live price data.
The primary catalyst for the rally was data from the U.S. Energy Information Administration (EIA), which reported commercial crude inventories fell by 8.0 million barrels for the week ending May 29. According to OilPrice.com, this draw brings stockpiles to 433.7 million barrels, placing them 3% below the five-year average for this time of year. The report also showed total product supplied, a proxy for demand, averaged 20.4 million barrels per day over the last four weeks, up 3.0% year-over-year.
The significant inventory decline underscores a tightening physical market, supporting higher futures prices. For Bakken producers, the strong WTI price is tempered by a regional discount. The Bakken differential was reported at -$3.42 per barrel versus WTI, meaning Bakken crude at the wellhead is priced approximately at $92.43.
Globally, supply chains continue to realign. According to a separate report from OilPrice.com, South Korea is undertaking a sweeping supply overhaul, planning to more than triple its imports of Canadian crude oil this year to as much as 16 million barrels. The Asian nation is seeking alternatives amid the "massive oil and gas supply shock in the Middle East." This shift represents a growing diversification of global crude flows, which can influence benchmark prices and long-term export opportunities for competing producers like those in the United States.
On the products side, the EIA reported a build in gasoline inventories of 3.4 million barrels, though demand remains robust with a four-week average of 8.8 million barrels per day. Industry watcher GasBuddy, cited by Rigzone, warned that while U.S. gasoline prices are currently "plunging," the "relief may be short lived," suggesting underlying market tightness could push prices higher again.
For operators in the Williston Basin, the current environment presents a favorable revenue outlook. Sustained WTI prices above $95, even with the standard regional discount, provide strong cash flow to support drilling and completion programs. The continued strong U.S. demand figures and shrinking inventories suggest a supportive domestic market for Bakken production, even as global trade patterns evolve.
Source
Live Price Data, OilPrice.com (U.S. Crude Oil Inventories in Freefall: EIA; South Korea Locks In Canadian Crude, LNG in Sweeping Supply Overhaul), Rigzone (GasBuddy Warns USA Gas Price Relief May be Short Lived)
