BISMARCK, N.D., April 25 (UPI) -- The number of rigs in service in North Dakota, the No. 2 oil producer in the United States, held steady despite last week's rally in oil prices, data show.
State data show 29 rigs actively exploring or producing oil and natural gas in the state, unchanged from the previous week, but steady at the lowest level in roughly a decade. In a mid-April report on state operations, Lynn Helms, director of the North Dakota Department of Mineral Resources, said that pressure from lower crude oil prices meant companies working in the state were "committed to running the minimum number of rigs."
Rig counts serve as a loose barometer for the health of the energy sector. North Dakota's rig count for Monday is 65 percent lower than this date in 2015 and 86 percent lower than the level in 2012. The all-time low point is zero.
For the fifth week in a row, oil services company Baker Hughes reported a decline in rig activity in North America, with a 2 percent drop to 431. Last year's count for the week ending April 22 was 932.
Lower oil prices means less capital is available for energy companies to invest in exploration and production activity. Crude oil prices, however, are up 22 percent from the start of April as market investors take stock of expected declines in total U.S. oil production and rumors of a production freeze among some members of the Organization of Petroleum Exporting Countries.
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.
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 $100 any time soon.
Helms said he expected the pressure from lower crude oil prices could last until the middle of next year.