Oil Prices Rise Amid Inventory Draw, Bakken Operators Remain Cautious

Oil prices advanced midday Sunday, with Brent crude surpassing $100 per barrel, supported by a significant weekly drawdown in U.S. inventories and ongoing geopolitical tensions.

West Texas Intermediate (WTI) crude traded at $96.6, a gain of $0.25 (0.26%), according to live price data. Brent crude, the international benchmark, rose more sharply to $100.21, up $0.71 (0.71%). Natural gas prices retreated to $3.02, down $0.14. Bakken crude traded at a discount of $3.42 below WTI.

The price strength follows a reported substantial decrease in U.S. commercial crude oil stocks. According to Rigzone, citing the latest U.S. Energy Information Administration (EIA) weekly report, crude inventories, excluding the Strategic Petroleum Reserve, fell by almost 8 million barrels week-on-week to stand at 445.0 million barrels as of May 15.

Despite the bullish combination of higher prices and tightening supplies, operators in North Dakota's Bakken formation are exhibiting caution regarding ramping up drilling activity. Reuters reported on May 22 that U.S. oil operators in North Dakota are moving cautiously despite a sharp rise in oil prices, which has been driven in part by conflict involving Iran. Companies are waiting to see if higher prices will last long enough to justify significant increases in capital spending.

This restraint means that while the current price environment—with WTI above $96 and Brent above $100—is financially favorable for producing wells, it may not immediately translate into a surge in new drilling activity or rig count growth in the Williston Basin. The cautious stance reflects a longer-term strategic focus on shareholder returns and capital discipline that has persisted across the industry.

For existing Bakken producers, the narrower differential of -$3.42 vs. WTI improves the net price received for their crude, enhancing cash flow from current operations. However, the operator caution highlighted by Reuters suggests that this cash flow may be prioritized for debt reduction, shareholder distributions, or selective efficiency projects rather than aggressive expansion.

The inventory draw reported by the EIA provides fundamental support for prices, indicating robust demand or constrained supply. When combined with the noted geopolitical risks, it creates a market structure that could sustain prices at elevated levels. The response from Bakken operators, however, will be measured, focusing on sustainability over rapid growth.