Oil Prices Plunge Despite Major U.S. Crude Inventory Draw

Crude oil prices fell sharply Wednesday, with West Texas Intermediate (WTI) trading down 3.8% to $70.43 per barrel despite a larger-than-expected drawdown in U.S. commercial inventories, according to live price data. The global benchmark Brent crude fell 4.05% to $73.96. The price for Bakken crude at the wellhead was trading at a discount of $3.42 per barrel to WTI.

The sell-off occurred alongside a significant decrease in national stockpiles. According to data from the U.S. Energy Information Administration (EIA) released Wednesday, commercial crude inventories fell by 6.1 million barrels for the week ending June 19, bringing total stocks to 412.1 million barrels, which is 7% below the five-year average for this time of year, OilPrice.com reported. The draw was more substantial than the 765,000-barrel decrease reported a day earlier by the American Petroleum Institute.

However, bearish factors overpowered the bullish inventory data. Rising product inventories and increased tanker traffic in a key global chokepoint pressured prices. The EIA reported builds of 2.1 million barrels in gasoline stocks and 3.1 million barrels in middle distillate inventories, according to OilPrice.com. Furthermore, market sentiment was weighed down by reports of more tankers resuming transit through the Strait of Hormuz and additional supplies entering the market following a U.S.-Iran interim peace deal, Rigzone reported.

For Bakken operators, the price drop directly impacts cash flow and drilling economics. With Bakken crude priced at a differential to WTI, the local price fell to approximately $67.01 per barrel. The decline comes even as underlying U.S. demand appears robust; total products supplied, a proxy for demand, averaged 20.5 million barrels per day over the last four weeks, up 2.1% year-over-year, according to the EIA data cited by OilPrice.com.

Natural gas prices provided a slight counterpoint to the oil slide, rising $0.05 to $3.23 per MMBtu. The mixed commodity performance highlights the complex current drivers for Williston Basin producers, where many wells produce both oil and associated gas.

The swift price drop from levels seen just a week ago underscores the market's current sensitivity to geopolitical supply developments and refined product balances, even in the face of tightening crude stocks. Operators will be watching for signs of price stabilization to guide near-term activity.