Oil Prices Rise on Geopolitical Tension; Bakken Crude Discount Holds

Front-month crude oil futures rose sharply in early Monday trading, with geopolitical tensions overshadowing a drop in natural gas prices. West Texas Intermediate (WTI) crude gained $1.29 to settle at $93.14 per barrel, a 1.4% increase. The international benchmark Brent crude rose $1.39 to $106.11 per barrel, according to live price data.

The price strength comes as analysts predict a prolonged period of high prices. Research firm BMI forecasts that Brent crude will remain above $100 per barrel for months, according to a report from OilPrice.com. Cedric Chehab, chief economist at BMI, cited the distant prospects for a U.S.-Iran agreement as a key supportive factor.

"A deal 'could take several months yet,'" Chehab told CNBC on Monday, with BMI projecting a potential agreement may not occur until the end of the first quarter of 2027. The analyst stated this dynamic would keep oil prices elevated, continuing pressure on global inflation and monetary policy.

Further geopolitical uncertainty stems from a proposed "energy ceasefire" in the Russia-Ukraine conflict, announced by U.S. President Donald Trump late Sunday. The proposal, described by a White House official as "refinery for refinery," aims to halt attacks on each side's oil refineries. Ukrainian President Volodymyr Zelenskyy said Ukraine awaits clear details and expects Russia to follow through, according to the OilPrice.com report.

For Bakken producers, the rising global benchmark is tempered by a persistent local discount. The Bakken differential—the price adjustment for Bakken crude delivered at Clearbrook, Minnesota, compared to WTI—was recorded at -$3.42 per barrel. This means Bakken crude is priced at approximately $89.72 per barrel, factoring in transportation costs and regional market dynamics.

The sustained high price environment for global benchmarks, if it holds, provides a favorable revenue backdrop for operators in the Williston Basin. However, the regional discount highlights the ongoing importance of pipeline and rail takeaway capacity for maximizing realized prices. The combination of strong Brent prices and a stable differential suggests healthy operating margins for efficient producers.

Natural gas markets moved counter to oil, with the benchmark price falling $0.09 to $3.13 per MMBtu on Monday.