WTI Surges Over $96 on Major Inventory Draw; Bakken Discount Widens

U.S. benchmark West Texas Intermediate (WTI) crude oil surged 2.56% to $96.30 per barrel on Thursday, October 15, driven by a significant weekly drawdown in domestic inventories, according to midday price data. The international benchmark Brent crude was largely unchanged at $105.98. Bakken crude traded at a discount of $3.42 per barrel to WTI.

The primary price support came from U.S. Energy Information Administration (EIA) data showing commercial crude inventories fell by 8.6 million barrels for the week ending October 9. This drawdown brings total stockpiles to 415.6 million barrels, which is now just 3% above the five-year average, according to the EIA report. The data indicates tightening U.S. supply, with total product demand averaging 21.1 million barrels per day over the last four weeks, up 2% year-over-year.

While oil markets focused on inventories, global natural gas prices remained near multi-year highs, providing underlying support for energy complexes. According to OilPrice.com, Europe's benchmark gas price is at its highest level since December 2022, with EU storage sites only 74% full as of October 14, well below the five-year average of 86%. Liquefied natural gas (LNG) flows from the Middle East remain about 80% lower than last year's volumes, keeping global gas markets tight.

"For the natural gas market, we have not seen a similar recovery in LNG flows from the Persian Gulf as we have with oil," Warren Patterson, Head of Commodities Strategy at ING, said in a note cited by OilPrice.com. The consultancy Timera Energy warned of a risk of late-winter price spikes if European storage runs low.

In other supply news, Rigzone reported that Angola is seeking to keep its crude oil production above 1 million barrels per day.

Implications for the Bakken The strong WTI price above $96 per barrel, coupled with the current Bakken differential, implies a wellhead price near $92.88 for North Dakota producers. The substantial inventory draw suggests robust demand for U.S. crude, which supports local operator revenues. However, the widening discount of Bakken crude to WTI highlights ongoing pipeline or takeaway considerations specific to the region. The concurrent strength in global gas prices may also benefit associated gas production in the Bakken formation.