WTI Dips Below $103 as Bakken Differential Widens to -$3.42

West Texas Intermediate (WTI) crude oil traded lower midday Monday, while global benchmark Brent posted a modest gain. The price action comes amid shifting global crude trade patterns, highlighted by a major Indian refiner's plans to cut Russian imports.

As of midday October 26, WTI was trading at $102.89 per barrel, down $0.38 (-0.37%) for the session. In contrast, Brent crude was at $111.99, up $0.29 (0.26%). The price for Bakken crude at the wellhead is directly impacted by the WTI benchmark, less a regional differential. That differential widened to -$3.42 per barrel versus WTI. Natural gas prices were also slightly lower at $3.03, down two cents.

The disparity between WTI and Brent is unfolding against a backdrop of changing global oil movements. According to a report from OilPrice.com, India's Bharat Petroleum Corporation Limited (BPCL) will "significantly reduce" its purchases of Russian crude in November due to high freight costs and premiums. BPCL's head of finance, Vetsa Ramakrishna Gupta, stated that Middle Eastern grades are now more commercially attractive.

This shift is part of a broader trend. OilPrice.com reported that India's crude oil imports from the Middle East jumped to 2.8 million barrels per day (bpd) in September, a 32% increase from August and the highest level since February. Over the same period, India's imports of Russian oil fell by 14% to 1.8 million bpd. The share of Russian oil in India's imports dropped to 33.5% from 46.6% in August.

The report attributes the change to increased competition from China for Russian barrels and higher availability of Middle Eastern oil flowing through the Strait of Hormuz. The premium for Russian crude has reportedly tumbled to $1-$2 per barrel over regional benchmarks for December cargoes, down from as high as $13 per barrel for October.

For Bakken operators, the midday price of just over $99.47 per barrel for Bakken crude (WTI minus the differential) maintains a strong revenue environment. However, the widening discount to the benchmark and the evolving global supply picture underscore the importance of market access and competitive transportation costs. The reshuffling of global crude flows, with India buying more from the Middle East, can influence the relative value of different crude streams, including those from the U.S. inland.

The steady natural gas price near $3.00 provides a stable, though less lucrative, backdrop for producers focused on associated gas from Bakken oil wells.