Oil Prices Surge Over $2, Gains Exceed 3%

Oil prices posted strong gains in early trading Thursday, with both major benchmarks rising more than three percent. West Texas Intermediate (WTI) crude settled at $91.46 per barrel, up $2.78. Brent crude climbed to $95.05, a gain of $2.80.

The rally was supported by expectations of tightening U.S. supplies. According to a report from Rigzone, Macquarie strategists are forecasting a week-on-week draw in U.S. crude inventories for the week ending May 22. An anticipated decline in stockpiles typically signals stronger demand or lower supply, putting upward pressure on prices.

For Bakken producers, the price surge directly improves cash flow and wellhead revenue. The Bakken differential, the discount at which Bakken crude trades versus the WTI benchmark, was recorded at -$3.42. This means Bakken crude is priced at approximately $88.04 per barrel. While operators sell at a discount to WTI to account for transportation costs, the sharp rise in the underlying benchmark lifts all prices.

The gains in the oil complex outpaced movement in natural gas markets. The natural gas price saw a marginal increase of one cent, settling at $3.11 per MMBtu on Thursday.

Sustained prices above the $90 threshold are critical for maintaining drilling activity in the Bakken formation. Higher prices improve returns on new wells and can justify increased capital spending by operators. The current price environment supports steady production levels in North Dakota's primary oil-producing region.

Market attention will now turn to official inventory data from the U.S. Energy Information Administration to confirm the predicted stock draw. If realized, the data could provide further fundamental support for prices. For royalty owners and operators, the day's price action represents a significant positive shift, enhancing the economic outlook for the remainder of the quarter.