Crude Prices Hold Near Recent Highs Amid Supply Developments

WTI Crude futures held steady at $86.85 per barrel in midday trading Friday, August 21, a marginal gain of two cents, while Brent Crude traded at $94.30, according to live market data. The Bakken differential, which sets the price for North Dakota crude relative to the U.S. benchmark, was reported at -$3.42 per barrel versus WTI.

The sideways price action follows a weekly U.S. inventory report showing another build in commercial crude stocks. According to a Rigzone report on EIA data, crude oil inventories, excluding the Strategic Petroleum Reserve, stood at 428.8 million barrels as of August 14. Rising inventories typically exert downward pressure on prices, but global supply factors are providing support.

One such factor is a newly announced supply agreement. Rigzone reported that Equinor secured a three-year deal to supply between five and more than nine million metric tons per year of crude oil to ORLEN. While this deal involves Norwegian crude, it underscores continued strong global demand for non-OPEC supply, which helps maintain a firm floor under international benchmarks like Brent.

For Bakken operators, the current price environment remains profitable. A WTI price near $87, even with the standard regional discount, keeps breakeven costs for most shale wells comfortably in the black. The Bakken differential of -$3.42 is within a typical historical range, indicating stable pipeline and rail logistics for moving North Dakota crude to market.

The stability in the differential suggests takeaway capacity from the basin is adequate at current production levels. The steady WTI price, despite the reported inventory build, indicates the market is balancing domestic supply with geopolitical and global demand factors. For royalty owners and producers in the Williston Basin, the current price sustains strong cash flow and supports ongoing maintenance of production levels.

Natural gas prices saw a slight increase to $2.80, a positive sign for associated gas production in the Bakken, though prices remain relatively low historically. The primary focus for the region remains the crude oil price, which continues to drive drilling and completion decisions.