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North Dakota rig count dipped below 30

No. 2 oil producer in the United States had been resilient against declining oil prices.

By
Daniel J. Graeber
North Dakota rig count drops below 30 after holding steady for three straight weeks. State is the No. 2 oil producer in the United States behind Texas. Photo by David Gaylor/Shutterstock
North Dakota rig count drops below 30 after holding steady for three straight weeks. State is the No. 2 oil producer in the United States behind Texas. Photo by David Gaylor/Shutterstock

BISMARCK, N.D., April 4 (UPI) -- After weeks of showing stability, the number of rigs deployed in North Dakota dipped below 30 for the first time in years, state data posted early Monday show.

State data posted early Monday showed 29 in active service, a 9 percent decline from the previous week. Once inspectors reviewed the figures later in the day, the official count was raised to 30. The state had 32 rigs actively engaged in oil and gas exploration and production for three straight weeks in March.

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The decline followed a week of volatility in crude oil prices, which ended last week with much of the gains for the year erased after Saudi Arabia cast doubt over a multilateral production meeting later this month. With supply-side strains persisting, markets had expected a potential freeze in production would put oil prices in check.

Rig counts serve as a loose barometer to measure the health of the energy industry.

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Stability in North Dakota had been in contrast to general activity in North America. Oil services company Baker Hughes said in its rig count report last week that the number of rigs in the United States fell to their lowest level in more than 60 years for their 15th straight week of declines.

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North Dakota reported 94 rigs in service on this date in 2015. The high-water mark for the state on this date was 207 reported in 2012. The all-time low point is zero.

North Dakota is the No. 2 oil producer in the United States behind Texas. North Dakota state data show crude oil production in January, the last full month for which data are available, was 1.12 million barrels per day, a 2.6 percent decline from December and 8 percent lower than the all-time high recorded in December 2014.

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Continental Resources, one of the larger stakeholders in the Bakken shale oil play in North Dakota, called for patience in early 2016 as the industry prepared for a sustained decline in the energy sector.

A drilling report last month from the U.S. Energy Information Administration found, however, that domestic drilling efficiency has improved since 2012. A recent report from the International Monetary Fund found oil from shale reserve areas in the United States has been "surprisingly resilient in the face of lower prices."

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