Oil Prices Surge Over 2.8%, Bakken Differential Widens

Oil prices rallied sharply in Thursday trading, with both major benchmarks climbing over 2.8% on supply concerns and inventory data. The surge strengthens the near-term revenue outlook for operators across the Williston Basin.

West Texas Intermediate (WTI) crude for November delivery settled at $94.77 per barrel, a gain of $2.61 (2.83%) for the session. The global benchmark, Brent crude, saw an even stronger increase, rising $3.97 (3.85%) to $107.05 per barrel.

The rally was supported by a larger-than-expected drawdown in U.S. commercial crude inventories. According to the U.S. Energy Information Administration, stockpiles fell by 4.5 million barrels last week, significantly exceeding analyst forecasts and signaling robust demand or tightened supply.

For Bakken producers, the price of crude at the wellhead is directly tied to the WTI benchmark, minus a regional discount known as the differential. On Thursday, the Bakken differential was reported at -$3.42 per barrel versus WTI. This means Bakken crude is priced at approximately $91.35 per barrel based on the day's WTI settlement. While the absolute price is favorable, the differential has widened from recent tighter levels, reflecting potential local logistical constraints or changes in regional pipeline takeaway capacity.

In related energy markets, natural gas futures also moved higher. The front-month contract gained $0.17 to settle at $3.32 per MMBtu. This provides a modest uplift for operators with significant gas production in the Bakken, though the region's economics remain predominantly driven by crude oil.

The significant price jump for Brent crude, which pushed its premium over WTI to over $12 per barrel, underscores ongoing global supply anxieties. These often relate to geopolitical tensions and the production policy of the OPEC+ alliance, which continues to manage output to support prices. A wide Brent-WTI spread can influence export economics for U.S. crude, including barrels originating from the Bakken.

The current price environment, with WTI flirting with the $95 level, creates a strong cash flow backdrop for Bakken operators. Sustained prices above $90 per barrel are typically sufficient to encourage steady drilling and completion activity in the play's core counties. However, operators remain focused on capital discipline and shareholder returns, meaning significant increases in rig count may be muted compared to prior price cycles. The widened differential will be a key point of monitoring for midstream operators and producers alike in the coming days.