Oil Prices Edge Higher as Bakken Operators Remain Cautious

Oil prices posted modest gains in midday trading Saturday, with global benchmark Brent crude topping the $100 per barrel mark. West Texas Intermediate (WTI) crude traded at $96.6 per barrel, up 0.26% or 25 cents, according to live price data. Brent crude rose 71 cents to $100.21 per barrel, a gain of 0.71%. The price for Bakken crude at the wellhead was trading at a discount of $3.42 per barrel versus WTI.

The price strength continues to be supported by geopolitical tensions, specifically the Iran war, which has driven a sharp rise in oil prices in recent weeks, according to Reuters and World Energy News. However, U.S. natural gas prices moved against the trend, falling 14 cents to $3.02 per MMBtu.

Despite the elevated price environment, major operators in North Dakota's Bakken formation are reportedly taking a cautious approach to increasing drilling activity. According to separate reports from Reuters and World Energy News published May 22, companies are waiting to see if the higher prices will be sustained before committing to significant capital expenditure increases.

This industry caution comes amid a significant drawdown in U.S. commercial crude inventories. According to a Rigzone report citing the latest U.S. Energy Information Administration (EIA) data, crude oil stocks, excluding the Strategic Petroleum Reserve, fell by almost 8 million barrels for the week ending May 15. Total commercial stocks stood at 445.0 million barrels.

For Bakken operators, the current price of nearly $93 per barrel for local crude (after accounting for the differential) provides strong cash flow but has not yet triggered a widespread return to aggressive growth. The operator sentiment suggests a focus on capital discipline and shareholder returns, with expansion plans contingent on a stable, long-term price signal rather than short-term spikes.

The sustained high differential of -$3.42 versus WTI indicates steady logistical and takeaway capacity from the Williston Basin, allowing producers to capture most of the gains from the rising global benchmark. The combination of high absolute prices, falling national inventories, and producer restraint could contribute to continued price support in the near term, barring a sudden shift in the geopolitical landscape or global demand.