August oil production in the
Bakken showed a slumping rate versus the previous month, according to a
report released in mid-October. The month’s production, under 1.2 million
barrels per day, is 21,000 barrels less than in July and marks the fifth
consecutive month in which production has declined.
The downward trend in particularly significant because August is usually
a peak oil production month,
according to Lynn Helms, director of North Dakota's Department of Mineral Resources.
The 2015 figure is the first time production has dropped in the Bakken
in over 10 ten years. The decline is primarily due to a drop in crude
oil prices, which sank to a six-year low in August, despite a worldwide
hike in demand.
The price slump has caused production-related construction to decline as
well. The number of new oil wells awaiting completion, for example, has
risen in tandem with the drop in production. August figures indicated
nearly 1,000 wells were standing uncompleted, according to the Department
of Mineral Resources, a jump of 79 wells from the July level. Oil producers
customarily slow the completion of wells in tough economic times to wait
out low prices.
The economic downturn is likely to have a negative impact on oil workers.
An official of the Maguire Energy Institute at Southern Methodist University
in Dallas spoke to the Montana Automobile Dealers Association about the
relationship,noting: "What this means of course is more downsizing, more layoffs, maybe
some bankruptcies, and asset sales. It's tough times in the oil patch,
not just in the Bakken but across the United States."
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