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North Dakota rigs hold steady after rough week

Federal drilling report says state crude oil production may decline.

By Daniel J. Graeber

BISMARCK, N.D., Aug. 31 (UPI) -- After a volatile week for crude oil markets, state data Monday from North Dakota show rig activity, a barometer of energy sector health, remained steady.

State data show 76 rigs actively exploring for or producing oil and natural gas, unchanged from last week. Crude oil prices dipped below $40 for the U.S. benchmark, West Texas Intermediate, as concerns over the health of the Chinese economy spilled across the global marketplace.

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Data from North Dakota show crude oil production in June, the last full month for which the state publishes data, was 1.21 million barrels per day, up about three-quarters of a percent from the previous month and just shy of the all-time record of 1.23 million bpd reached in December.

A drilling productivity report from the U.S. Energy Information Administration finds rig totals in North Dakota, which hosts the lucrative Bakken oil basin and is the No. 2 oil producer in the country, should continue to show gains through September. While the rig count is more than 50 percent below this date in 2014, EIA finds a net increase in the amount of oil taken from new wells.

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Data from oil services company Baker Hughes confirm the state's net zero decline in weekly rig activity. Texas, the No. 1 oil producer in the nation, gained three rigs.

The EIA's drilling productivity report shows legacy oil production in North Dakota on a steady decline, which offsets gains from new wells. By September, EIA expects North Dakota crude oil production will fall.

In its monthly market report, EIA said total U.S. crude oil production is expected to decline through at least the middle of next year.

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