Oil Prices Surge Over 2%, WTI Nears $97 on OPEC+ Rumors

Front-month crude oil futures rallied sharply on Monday, with both major benchmarks posting gains exceeding 2%. West Texas Intermediate (WTI) crude for June delivery settled at $96.66 per barrel, a gain of $2.26. The global benchmark, Brent crude, rose $2.67 to close at $101.80 per barrel.

The rally was largely attributed to market anticipation ahead of the upcoming OPEC+ meeting. According to a Reuters report, OPEC and its allies, led by Russia, are not expected to change their current oil output policy when the group meets online on June 2. The report noted that several OPEC+ producers are already making additional output cuts under a voluntary deal that runs through the end of June. This expectation of continued supply restraint provided a firm floor for prices.

Further supporting prices were ongoing geopolitical tensions. A Bloomberg report indicated that Israel's military campaign in Gaza continued, sustaining a geopolitical risk premium in the oil market. Additionally, the report noted that recent U.S. economic data showing slower-than-expected growth has fueled speculation that the Federal Reserve may cut interest rates this year, a move that could stimulate oil demand.

For Bakken producers, the price surge translates directly to improved wellhead economics. The Bakken crude differential to WTI at the Clearbrook, Minnesota, hub was recorded at -$3.42 per barrel. This means Bakken crude is priced at approximately $93.24 per barrel ($96.66 - $3.42). The stable differential, coupled with the strong rise in the underlying WTI benchmark, significantly increases the netback for barrels shipped from the Williston Basin.

Natural gas prices also saw a modest uptick. The front-month Henry Hub contract added $0.05 to settle at $2.73 per million British thermal units (MMBtu). While not a primary driver for most Bakken operators, who are predominantly oil-focused, higher gas prices provide incremental revenue for associated gas production.

The current price environment, with WTI flirting with the $97 level, provides a favorable backdrop for capital discipline and shareholder returns among North Dakota operators. Sustained prices above $90 per barrel are generally considered supportive for maintaining current production levels and funding limited drilling activity without requiring significant budget expansions. Market attention now turns to weekly U.S. inventory data from the American Petroleum Institute and Energy Information Administration for further signs of supply-demand balance.