Oil and gas production in North Dakota retreated a bit in November after hitting all-time highs during the previous month.
North Dakota, the nation's second-largest oil producing state after Texas, pumped out 1.38 million barrels per day in November, down 1.2 percent from October. Natural gas production fell 1.5 percent in November to 2.52 million MCFs per day. (An MCF is 1,000 cubic feet of gas.)
"This is the marginal drop in production I warned people about with winter coming on and lower oil prices," said Lynn Helms, director of North Dakota's Department of Mineral Resources.
Oil prices dropped rapidly in November, while the state experienced about 15 days of below-average temperatures and above-average precipitation. Oil production in North Dakota tends to slow somewhat as winter weather sets in.
Despite falling oil prices, "the industry remains cautiously optimistic," Helms said. "They have not backed down on the rig count."
The number of oil rigs currently operating in North Dakota is 68, up from 67 in December and 64 in November. A rising rig count indicates operators are drilling more new wells.
West Texas Intermediate (WTI), the benchmark U.S. crude oil price, hit a nearly four-year high of $76 in October. But oil production rose while fear spread about a weakening global economy, sending WTI below $50 per barrel by the last half of December and into early January. The price has since rallied to $52.
North Dakota oil trades at a discount price to WTI and is currently at about $37 a barrel.
