Posted on 11/04/2015 8:11:38 AM PST by bananaman22
The performance of Blood & Oil, a soap opera based on the North Dakota oil boom, is not going well. The show saw its episodes trimmed by ABC amid tepid viewer interest. But the real life Bakken is also suffering from a lack of interest, a development that doesn’t bode well for the oil-producing region.
The Bakken had been a key part of the U.S. shale boom over the past half-decade. But production peaked at 1.22 million barrels per day in December 2014. Since then production has bounced around, with month-to-month fluctuations, but is slightly down from that high point reached almost a year ago.
The EIA expects the Bakken’s production to drop by 23,000 barrels in November, a decline second only to the Eagle Ford in terms of size.
But falling production is contributing to another problem for the region. Several East Coast refiners are losing interest in Bakken crude, instead preferring to import oil from abroad to use in their refineries. According to Reuters, it is now cheaper for East Coast refiners to import oil from South America, Africa, or the Middle East, than it is to buy oil from North Dakota. The transit costs of moving crude by rail from North Dakota across the country tips the balance in favor of foreign oil.
(Excerpt) Read more at oilprice.com ...
Get rid of the obstructionists (including odumbo) and we will see a major increase, of that I have no doubt.
Maybe, but the underlying problem is the low price of crude.
I used to live in North Dakota and I've got a sneaking suspicion that the locals are using this bad news plus the coming winter to send some of the riffraff attracted by the oil boom packing and moving south.
Market economics? Didn’t ObaMao tell us this was “Republican Economic Theory”? We tried it and it didn’t work. < / sarcasm >
23,000 barrels per month is such a catastrophic drop in 1.22 million barrels per day, isn’t it.
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The problem isn’t the one month drop. It is the growing trend getting worse.
http://www.eia.gov/petroleum/drilling/pdf/dpr-full.pdf
This article makes it sound like people should have an expectation that oil drilling is a stable industry that doesn’t go through boom and bust cycles. Aren’t these shale oil start up and mom & pop operations the very definition of boom & bust? Why shouldn’t we have expected a bust at some point? The industry will shake off the weak players, consolidate and become more mature.
Government is getting in the way, to be sure. But certainly the lower cost of crude everywhere is slowing things down.
I know of a large gold mine that wants to get going here in Alaska, they need a certain price of gold to be economically feasable. Until gold reaches a higher price and stays there, it aint happening. There is gold there for sure, just costs too much to get it.
The beautiful thing is that the North Dakota cost of production represents the ultimate cap on oil prices.
There was an oversupply on the market, so some of the expansion had to go away and the market is contracting. Eventually it will over contract and expand again.
There is no good reason to think that the industry will collapse and oil will jump back to 150 $/bl when there is oil that can be profitably extracted at 50 $/bl.
Can’t Mr. Obama issue an Executive Order repealing the law of supply and demand?
“Maybe, but the underlying problem is the low price of crude.”
Exactly. Nothing hard to understand about supply and demand.
Nixon fork the mine? Worked there a few years.
No, a company called Tower Hill Mines has been looking to get something going in Livingood, AK.
They are keeping crude low to kill the fracking business
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