Oil Rises Amid Supply Return, Bakken Differential Holds at -$3.42
WTI gains over 1.5% as Middle East exports ramp up, though Asian demand cools and U.S. drivers face high holiday gas prices.
Crude oil prices posted solid gains on Thursday, with West Texas Intermediate (WTI) settling at $71.46 per barrel, up $1.12 or 1.59%. Brent crude rose 1.57% to $75.03. The price for Bakken crude, a key benchmark for North Dakota producers, strengthened in tandem, maintaining a differential of $3.42 per barrel below WTI, according to live market data.
The price increase comes as supply from the Middle East continues to return to global markets. According to OilPrice.com, Saudi Arabia is restarting loadings at its Ras Tanura export terminal, Iraqi exports are ramping up, and tanker traffic through the critical Strait of Hormuz has improved dramatically in the past week. Kuwait expects to raise its oil production to 2 million barrels per day within a week, a significant jump from an average of 573,000 bpd in May.
However, demand headwinds are emerging. OilPrice.com reported that Asia's crude buying spree is "running out of steam," with refiners having wrapped up cargo orders for June and July. Lingering uncertainties about the Strait of Hormuz and high freight costs are deterring immediate spot purchases. To attract Asian buyers, Middle Eastern producers would need to offer significant discounts, which may not offset high insurance and tanker costs.
For Bakken operators, the steady differential and rising underlying WTI price are supportive. The current pricing environment suggests Bakken crude is competitively positioned, with local wellhead prices near $68 per barrel. The return of Middle Eastern supply to the market, while a potential source of global price pressure, is being met with a recalibration of demand, creating a balanced trading range.
U.S. consumers, however, are not seeing full relief at the pump. Despite six straight weeks of declines, GasBuddy projects the national average gasoline price for July 4 will be about $3.75 per gallon—the second-highest on record for the holiday. OilPrice.com notes that retail prices lag wholesale markets, and lingering shipping uncertainty in the Middle East has slowed the decline. This sustained demand for transportation fuels provides underlying support for crude markets.
In related commodity news, lithium carbonate futures in China tumbled ~10% to a 10-week low this week on speculation that battery giant CATL may soon restart its massive Jianxiawo mine. The potential surge in lithium supply contrasts with the currently tightening balance in oil markets, though it points to longer-term energy transition pressures.
The immediate outlook for Bakken producers remains tied to global crude flows and holiday demand. With WTI holding above $71 and the local differential stable, operational margins are protected for now, but the market is watching the pace of Middle East export recovery and its impact on global inventories.
Source
Live Price Data, OilPrice.com (Asia's Crude Buying Spree Is Running Out of Steam, Gas Prices Are Falling. Your July 4 Fill-Up Still Won't Feel Cheap.)
