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Bakken oil prices rising after bumpy winter

Posted at 8:20 AM, Mar 14, 2021
and last updated 2021-03-14 10:20:34-04

This winter's extreme conditions showcased the good news/bad news scenario in North Dakota's Bakken oilfields.

Ninety-mile-per-hour winds in January put a major dent in North Dakota's monthly oil production.

Mineral Resources Director Lynn Helms says the extreme winds did widespread damage to the region's power infrastructure. Some areas lost power for up to 10 days, while Rural Co-ops scrambled to make repairs.

As a result, January's oil production in North Dakota fell by as much as 44,000 barrels per day compared to December, a 4 percent drop in production.

Then in February, extreme cold temperatures showcased the volatility in natural gas. Demand for natural gas skyrocketed as southern states were plunged into the deep freeze, leading to a 10 percent price rise and fall in short order. Prices spiked as high as $23.42/mcf on Feb 17. This week, that same natural gas is selling for just $2.23/mcf.

As for the current spike in oil prices, Helms said U.S. producers feel the current West Texas Intermediate price of $64 - $65 a barrel is a short-term peak, and not a long-term trend.

Asked if the oil prices might spark new drilling across the Bakken, Helms said producers tell him "no," at least not this year. Most producers have already set their capital budgets for the coming summer, but if oil prices remain near current levels companies might revisit their drilling plans this coming fall.

Another positive sign in the Bakken this month- the number of active oil rigs remains steady at 15. That equals February's rig count and is up three from the 12 rigs operating in January.

Rig counts in the Bakken hit an all-time high in May of 2012, when 218 active rigs were in operation.