After months of watching and waiting, It has finally happened.
North Dakota oil production has sunk below the 1 million barrel per day mark.
Ben Smith tells us what this means for the nations second biggest oil producer.
“This is the month that we’ve all been anticipating but not looking forward to,” says Lynn Helms with North Dakota’s Oil and Gas Division
Even with prices at a third of levels seen during the boom.
It took some time for the Bakken’s momentum to shift.
The main cause for the drop is some operators chose to restrict production while waiting for better oil prices.
“I think it’s more of a psychological thing than it is of an actual physical thing in terms of state revenues or actual physical impact on the global markets or even U.S.. storage. It does send a signal to the world markets that U.S.. producers are serious about reducing activity, reducing costs, reducing production and I think that should help to support the recent price,” Helms
Crude climbed into the 50 dollar range in recent weeks, a far cry from the low 40’s of August.
Still Helms says it’s not enough to cause producers to mobilize fracking crews.
“We still expect that we will bottom around 900,000 barrels a day so there is still more slowing to come over the next few months,”
He does expect prices to remain stable for the next few months.
And production may start to build back up next year.
Helms says even if it doesn’t, North Dakota’s oil play is far from over.
“It takes more than 10 years for the current rig count to exhaust all the drilling prospects in the core area,” says Helms
He says the Bakken is still very healthy, and most of the good years are yet to come.
Helms says the world oil market has reached a balance between supply and demand.
That means the recent price jump into the 50-dollar range might stick around for a while.