Oil Prices Surge Past $91, Inflation Hits 3-Year High

Oil prices surged Wednesday, with West Texas Intermediate crude settling at $91.72 per barrel, a gain of $3.52 or 3.99 percent, according to live market data. Brent crude rose $3.09 to $94.54. The price for Bakken crude at the wellhead strengthened, with its discount to WTI narrowing to $3.42 per barrel.

The rally coincides with a U.S. government report showing inflation climbed to 4.2 percent annually in May, its highest rate in three years, according to OilPrice.com. Energy prices were the primary driver, jumping 23.5 percent from a year ago and accounting for roughly 60 percent of the monthly increase. The Bureau of Labor Statistics data linked the inflationary pressure to rising energy costs tied to the ongoing conflict involving Iran.

Supply disruptions from the Middle East war are a major factor. Rystad Energy reported that cumulative oil supply losses have now reached one billion barrels and are on track to nearly double by year-end, according to a Rigzone summary of the firm's analysis.

Despite the high price environment, global investment in oil and gas is not following historical patterns. BMI forecasts total oil and gas spending in 2026 will be $636 billion, a modest 0.5 percent dip from 2025, OilPrice.com reported. The International Energy Agency also predicts a decline in oil investment this year, which would mark a third consecutive annual decline. Forecasters cite market uncertainty, climate policies, and industry financial discipline as reasons producers are not embarking on major new drilling campaigns despite prices substantially above 2025 averages.

For Bakken operators, the current price above $88 for Bakken crude provides strong cash flow but within a cautious macro environment. The narrowed differential suggests strong demand for the region's light sweet crude. However, the broader industry trend of restrained capital spending, as noted by BMI and the IEA, suggests majors and independents in the Williston Basin will likely continue prioritizing shareholder returns and high-certainty projects over aggressive production growth.

The Federal Reserve faces a challenge from energy-driven inflation, with recent research from the Federal Reserve Bank of Boston suggesting the current oil shock may add roughly 1.5 percentage points to inflation over the coming year, OilPrice.com reported.