Oil Prices Retreat Friday as Supply Concerns Offset Geopolitical Risk

Oil prices declined in early trading Friday, April 24, pulling back from recent gains driven by geopolitical tensions. West Texas Intermediate (WTI) crude was trading at $94.87 per barrel, down $0.98 or 1.02%, according to live price data. The international benchmark Brent crude fell $0.59 to $98.76 per barrel.

The retreat comes despite a sharp price increase earlier in the week. According to Rigzone, oil prices rose sharply on Wednesday, April 23, as escalating conflict risks involving Iran threatened flows through the critical Strait of Hormuz chokepoint.

Downward pressure on prices Friday stemmed from a reported build in U.S. crude inventories. Rigzone reported that U.S. crude oil stocks, excluding the Strategic Petroleum Reserve, rose by almost 2 million barrels week-on-week to stand at 465.7 million barrels as of April 17, according to the Energy Information Administration.

In North Dakota, the Bakken crude differential to WTI was $-3.42 per barrel. The relatively narrow discount helps improve netbacks for Bakken producers. The current high-price environment is expected to spur increased activity in the state. A state regulator announced Tuesday that North Dakota's crude production is expected to increase in the coming months as operators target surging oil prices, according to a report from World Energy News.

For Bakken operators, the price dynamics present a mixed but largely favorable outlook. Sustained prices well above $90 provide strong cash flow and incentivize drilling and completion activity. The anticipated production increase signals operator confidence in the price deck. However, the market remains sensitive to both geopolitical shocks and fundamental supply data, leading to volatility.

Natural gas prices also moved lower Friday, trading at $2.69 per barrel, a decrease of $0.07. Weak natural gas prices continue to challenge the economics of associated gas production in the Bakken, where gas capture and flaring regulations add operational complexity.

The week's trading highlights the ongoing tug-of-war between geopolitical risk premiums and physical market fundamentals. For now, prices remain elevated, supporting the state regulator's forecast for rising Bakken output.