North Dakota Anxious About Lower Oil Prices

---

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--North Dakota oil producers may be seeking discounts from upstream service providers should oil prices stay lower for longer, a state regulator said.

Crude oil prices last year were largely range-bound as the U.S. economy saw inflationary pressures left over from the COVID-19 pandemic ease. They've largely declined for much of this year amid economic policies from U.S. President Donald Trump.

By Wednesday morning, West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, was trading slightly lower to linger around $63 per barrel despite word that Trump could lower tariffs on Chinese imports. Prices were down around 11% so far in April.

Nathan Anderson, the director of the North Dakota's Department of Mineral Resources, said operators working in the Bakken shale are looking at breakeven prices of between $50 and $60 per barrel.

"It is likely that as prices dip into the low $60s that companies are probably going to service providers asking for cost reductions," he added.

By comparison, representatives from the energy sector told the Federal Reserve Bank of Dallas that operators in the Permian needed oil priced at $65 per barrel to make a profit.

WTI averaged $71.53 per barrel in February. In February, the last full month for which North Dakota published data, the state produced 1.16 million barrels per day (BBL/d) of crude oil. That's nearly 6% above the state revenue forecast, but 1% below January levels.

The federal government estimates that WTI will average $63.88 per barrel this year, and dip to $54.48 per barrel for 2026. With lower prices ahead, the Energy Information Administration, the data arm of the Department of Energy, said it expects North Dakota crude oil production to average 1.23 million BBL/d this year and to decline to 1.14 million BBL/d by next year.

Elsewhere, state regulators said the gas-to-oil ratio in the Bakken formation is changing as the basin matures. That ratio increases as pressure declines in the reservoir due to production. As the pressure drops, heavier hydrocarbons get trapped in subsurface pores, allowing room for lighter products such as natural gas to move into the production well.

The regulator said the amount of natural gas flared in the state increased by 400,000 cubic feet per day to reach 177.4 million cubic feet per day in February. The state aims to capture 95% of the natural gas flared off during oil production.

Apart from tariffs, which prompted the International Monetary Fund to lower its global forecast for economic growth, Trump has advocated heavily for the domestic oil and gas industry by creating a council for energy dominance. Industry representatives, however, said that agenda doesn't match an economic policy dragging on crude oil prices.

The oil and gas sector accounts for about 30% of the North Dakota's overall gross business volume.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).