BISMARCK, N.D., July 25 (UPI) -- The number of rigs actively exploring for or producing oil and natural gas in North Dakota is up 10 percent from last week, state data show.
State data shows 32 rigs actively exploring for or producing oil and gas as of Monday, an increase of 10 percent from last week. The move in North Dakota mirrors developments elsewhere in the United States, where relative stability in crude oil prices, since a collapse below $30 in early 2016, is building confidence in the industry.
Data from Baker Hughes show the number of active rigs for the week ending July 22 increased for the fourth straight week. Crude oil prices moved lower last week after Baker Hughes released its data as traders worried a recovery in rig counts would push markets back toward the supply side.
Morgan Stanley said in a research note that crude oil prices are near their lowest level since the middle of May and higher crude oil inventories, coupled with higher rig counts, could add negative pressure to the price for oil.
The North Dakota figures may show a lag time in a balancing under way in the oil market between supply and demand. Rig counts in North Dakota, which hosts parts of the Bakken shale oil basin, hit a historic low early this year after oil sank below $30 per barrel.
May rig counts in North Dakota were at or near record lows. However, in a monthly report, the North Dakota Industrial Commission's Oil and Gas Division said rig counts are down nearly 90 percent from their all-time high.
North Dakota is the No. 2 oil producer in the United States behind Texas. State lawmakers hold a special session next week to review revenue options in the face of lower crude oil prices. Without a course correction, the state estimates its general fund will be short about $310 million by the end of the current biennium.