Oil Prices Climb Over $78 as Bakken Discount Widens Slightly

Front-month crude oil futures rose in early trading Sunday, with West Texas Intermediate (WTI) gaining over a dollar per barrel. The price move comes despite a reported build in U.S. commercial stockpiles.

According to live price data, WTI crude was trading at $78.18 per barrel, an increase of $0.89 or 1.15%. The global benchmark, Brent crude, was at $83.55, up $1.06 or 1.29%. Natural gas prices saw a modest increase to $2.66 per MMBtu.

The Bakken crude price differential to WTI widened slightly to a discount of $3.42 per barrel. This means Bakken-grade crude at the wellhead is priced approximately at $74.76 per barrel based on the current WTI price.

The upward price momentum persists even after a reported increase in U.S. inventories. Rigzone reported that U.S. crude oil stocks, excluding the Strategic Petroleum Reserve, stood at 407.0 million barrels as of July 31, according to the latest U.S. Energy Information Administration weekly petroleum status report. The data indicates a week-on-week rise in commercial stockpiles, which typically exerts downward pressure on prices.

For Bakken operators, the current price environment remains supportive for continued drilling and completion activity. A WTI price above $78 provides solid economics for most wells in the core of the North Dakota play. However, the wider local discount of -$3.42 slightly reduces the netback received by producers selling Bakken crude, compared to those selling priced directly at the WTI hub in Cushing, Oklahoma.

The simultaneous price rally and inventory build suggests market participants may be looking beyond the most recent stock data. Traders are likely weighing other factors, including global demand forecasts, geopolitical tensions, and the outlook for production discipline from major exporting nations.

The gains in natural gas prices, though small, offer a marginal boost for operators with significant associated gas production in the Bakken, where gas capture and monetization remain key operational and regulatory focuses.

Market attention will now turn to upcoming weekly inventory data and any developments that could influence the supply-demand balance heading into the autumn months.