• 1 hour Gunmen Kidnap Nigerian Oil Workers In Oil-Rich Delta Area
  • 3 hours Libya’s NOC Restarts Oil Fields
  • 4 hours US Orion To Develop Gas Field In Iraq
  • 3 days U.S. On Track To Unseat Saudi Arabia As No.2 Oil Producer In the World
  • 3 days Senior Interior Dept. Official Says Florida Still On Trump’s Draft Drilling Plan
  • 3 days Schlumberger Optimistic In 2018 For Oilfield Services Businesses
  • 3 days Only 1/3 Of Oil Patch Jobs To Return To Canada After Downturn Ends
  • 3 days Statoil, YPF Finalize Joint Vaca Muerta Development Deal
  • 3 days TransCanada Boasts Long-Term Commitments For Keystone XL
  • 3 days Nigeria Files Suit Against JP Morgan Over Oil Field Sale
  • 3 days Chinese Oil Ships Found Violating UN Sanctions On North Korea
  • 4 days Oil Slick From Iranian Tanker Explosion Is Now The Size Of Paris
  • 4 days Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 4 days Venezuelan Output Drops To 28-Year Low In 2017
  • 4 days OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 4 days Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 4 days Kinder Morgan Delays Trans Mountain Launch Again
  • 4 days Shell Inks Another Solar Deal
  • 5 days API Reports Seventh Large Crude Draw In Seven Weeks
  • 5 days Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 5 days EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 5 days IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 5 days Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 5 days Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 5 days Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 5 days Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 5 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 6 days Norway Grants Record 75 New Offshore Exploration Leases
  • 6 days China’s Growing Appetite For Renewables
  • 6 days Chevron To Resume Drilling In Kurdistan
  • 6 days India Boosts Oil, Gas Resource Estimate Ahead Of Bidding Round
  • 6 days India’s Reliance Boosts Export Refinery Capacity By 30%
  • 6 days Nigeria Among Worst Performers In Electricity Supply
  • 6 days ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 7 days Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 7 days Saudis To Award Nuclear Power Contracts In December
  • 7 days Shell Approves Its First North Sea Oil Project In Six Years
  • 7 days China Unlikely To Maintain Record Oil Product Exports
  • 7 days Australia Solar Power Additions Hit Record In 2017
  • 7 days Morocco Prepares $4.6B Gas Project Tender
Alt Text

The Biggest Loser Of The OPEC Deal

The OPEC production cut deal…

Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

More Info

Bears Burst Bakken Bubble

Bears Burst Bakken Bubble

Ongoing concerns of the Spanish debt crisis dragged on international markets Monday. Oil prices, meanwhile, had rallied last week amid tensions in the Persian Gulf. By Monday, however, Iran had softened its stance on oil transit lanes through the Strait of Hormuz. U.S. crude oil for September delivery, meanwhile, was down more than $2 to end Monday at $89.23. Analysts in the United States expressed concern that, if U.S. crude oil prices continue to fall, development of shale oil fields in North Dakota could slow down.

Critics of U.S. President Barack Obama last week passed legislation through the House of Representatives that calls for an expanded offshore lease plan that goes well beyond what the White House envisions for the next five years. The American Petroleum Institute, meanwhile, said oil well completions in the United States increased by 13 percent during the second quarter compared with the previous year.

"The oil and natural gas industry expanded oil drilling in the second quarter of 2012 thanks in large part to access on private and state lands," said Hazem Arafa, director of API's statistics department, in a recent statement.

This supports Obama administration statements that domestic oil production is at a historic high. The White House reopened the Gulf of Mexico to drilling activity and, in Norway, the U.S. interior secretary said the arctic waters off the coast of Alaska may soon experience a similar rush. But it’s the Bakken crude oil deposit in the Northern Plains that is experiencing the most significant boom.

Authorities in North Dakota said drillers hit pay dirt in the Bakken formation with nearly every attempt. Production there averages around 800,000 barrels per day, according to some estimates. New advances in technology used to exploit hydrocarbons trapped in shale deposits like the Bakken formation, however, makes those wells more expensive than in conventional plays. It costs roughly $10 million per well to tap into the Bakken formation, suggesting that a weakened U.S. economy and declining crude oil values could suppress the amount of money drillers have to spend on shale plays.

This week, the Obama administration said more than 20 million acres in the western Gulf of Mexico would go on the auction block in November.  The Bureau of Ocean Energy Management estimates the proposed lease sale could lead to the production of as much as 200 million barrels of oil and 938 billion cubic feet of natural gas. Downgrades in the credit rating for major European economies by Moody's Investors Service and sluggish growth in the U.S. economy, meanwhile, is keeping oil prices down. Analysts last week warned that a continued slump in the U.S. benchmark for crude oil could drag on the boom under way in oil fields in North Dakota. Despite pressure from critics of domestic energy policy, the offshore oil sector is moving along at a historic clip. If bullish sentiments about the state of the global economy continue to wane, however, it’s the bears that may ultimately burst the North Dakota oil bubble.

By. Daniel Graeber of Oilprice.com

For the latest oil prices visit our homepage.




Back to homepage


Leave a comment
  • Hans Nieder on July 25 2012 said:
    Mr Graeber, a very inventive title!

    Regrettably, very little of your OP, said much about the Bakken Play...

    Today's production is closer to 640k than the stated 800k...

    Expense per well is 8m to 10m, with essentially no dry drills...Costs can and will come down...

    The title should read: Bulls Burst Bears Babel Bakken Bubble...

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News