Oil Prices Edge Higher as Bakken Operators Remain Cautious

Global oil benchmarks extended their gains on Saturday, with Brent crude topping $100 per barrel, as geopolitical risk continues to underpin the market. According to live price data, West Texas Intermediate (WTI) crude settled at $96.60 per barrel, a gain of $0.25. The international benchmark, Brent crude, rose $0.71 to $100.21 per barrel. Natural gas prices, however, moved in the opposite direction, falling $0.14 to $3.02.

The primary driver for the elevated price environment remains the ongoing conflict involving Iran, as noted by multiple news sources. Despite the sharp rise in prices, operators in North Dakota's Bakken formation are exhibiting significant caution regarding increasing drilling activity. According to reports from Reuters and World Energy News, companies are waiting to see if the higher price levels will be sustained before committing to ramp up capital spending and drilling programs.

This operator restraint comes even as the price for Bakken crude shows relative strength. The Bakken differential to WTI narrowed to -$3.42 per barrel on Saturday. A narrower discount means Bakken producers receive a price closer to the WTI benchmark, improving netbacks for barrels sold at the wellhead.

Supporting the bullish price structure are tightening U.S. inventories. According to a Rigzone report citing the U.S. Energy Information Administration, commercial crude oil stocks, excluding the Strategic Petroleum Reserve, fell by almost 8 million barrels for the week ending May 15. Stocks stood at 445.0 million barrels, indicating robust demand or constrained supply.

The combination of geopolitical risk and falling inventories has created a high-price environment that historically triggers a surge in drilling activity. However, the reported caution from Bakken operators suggests a shift in industry strategy. Companies appear focused on capital discipline and shareholder returns, prioritizing financial resilience over rapid production growth. This approach may lead to a more moderated increase in the state's rig count and oil output despite prices nearing $100 for WTI.

For royalty owners and service companies in the Williston Basin, the current market presents a mixed picture. While higher absolute prices and a stronger differential boost revenue per barrel, the operator hesitancy to aggressively drill new wells could limit the near-term economic ripple effect across the region. The focus for the market will now be on the durability of the Iran-driven price premium and whether sustained high prices eventually overcome corporate caution.