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North Dakota showing little rig movement

Crude oil prices move up about 30 percent for April, though No. 2 oil producer standing still.

By Daniel J. Graeber
North Dakota, the No. 2 oil producer in the United States, shows little to no rig count variation despite a 30 percent rally in crude oil prices. File photo by Gary C. Caskey/UPI
North Dakota, the No. 2 oil producer in the United States, shows little to no rig count variation despite a 30 percent rally in crude oil prices. File photo by Gary C. Caskey/UPI | License Photo

BISMARCK, N.D., May 2 (UPI) -- Despite a rally in oil prices of around 30 percent, the number of rigs deployed in shale-rich North Dakota is steady for the fifth straight week, data show.

State data from North Dakota, the No. 2 oil producer in the United States, show 29 rigs deployed across the state as of Monday morning local time, unchanged for the day since April 4. North Dakota entered April with a rig count below 30 for the first time in years as crude oil prices traded at $36.05 per barrel and left the month with little to no movement despite a price rally for the month of roughly 30 percent.

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Economists have said the supply-side pressures that pushed oil prices sharply lower last year are starting to fade, though few expect prices to recover to the $100 norm from two years ago. North Dakota's rig count, which serves as a loose gauge for the health of the overall energy sector, is 65 percent lower than this date last year, when oil was selling for about $64 per barrel.

Lynn Helms, director of the North Dakota Department of Mineral Resources, said last month that pressure from lower crude oil prices meant companies working in the state were "committed to running the minimum number of rigs."

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Oil remains under pressure, albeit weakening, from a market tilted toward the supply side as demand falters in a lackluster global economy. Last week, Hess Corp. which holds about 10 percent of the rigs in service in North Dakota, reported net production from the Bakken shale reserve area in North Dakota in Montana was up 2.7 percent from the fourth quarter to 110,000 barrels of oil equivalent per day.

Oil production in North Dakota as of February, the last full month for which the state has data, was 1.1 million barrels per day, down about 0.3 percent from January and nearly 9 percent below the all-time high recorded in December 2014.

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