• 50 mins BP To Invest $200 Million In Solar
  • 2 hours Tesla Opens New Showroom In NYC
  • 3 hours Petrobras CEO Hints At New Partner In Oil-Rich Campos Basin
  • 5 hours Venezuela Sells Oil Refinery Stake To Cuba
  • 11 hours Tesla Is “Headed For A Brick Wall”
  • 16 hours Norwegian Pension Fund Set to Divest From Oil Sands and Coal Ventures
  • 20 hours IEA: “2018 Might Not Be Quite So Happy For OPEC Producers”
  • 21 hours Goldman Bullish On Oil Markets
  • 22 hours OPEC Member Nigeria To Issue Africa’s First Sovereign Green Bond
  • 1 day Nigeria To Spend $1B Of Oil Money Fighting Boko Haram
  • 1 day Syria Aims To Begin Offshore Gas Exploration In 2019
  • 1 day Australian Watchdog Blocks BP Fuel Station Acquisition
  • 1 day Colombia Boosts Oil & Gas Investment
  • 2 days Environmentalists Rev Up Anti-Keystone XL Angst Amongst Landowners
  • 2 days Venezuelan Default Swap Bonds At 19.25 Cents On The Dollar
  • 2 days Aramco On The Hunt For IPO Global Coordinators
  • 2 days ADNOC Distribution Jumps 16% At Market Debut In UAE
  • 2 days India Feels the Pinch As Oil Prices Rise
  • 2 days Aramco Announces $40 Billion Investment Program
  • 2 days Top Insurer Axa To Exit Oil Sands
  • 3 days API Reports Huge Crude Draw
  • 3 days Venezuela “Can’t Even Write A Check For $21.5M Dollars.”
  • 3 days EIA Lowers 2018 Oil Demand Growth Estimates By 40,000 Bpd
  • 3 days Trump Set To Open Atlantic Coast To Oil, Gas Drilling
  • 3 days Norway’s Oil And Gas Investment To Drop For Fourth Consecutive Year
  • 3 days Saudis Plan To Hike Gasoline Prices By 80% In January
  • 3 days Exxon To Start Reporting On Climate Change Effect
  • 4 days US Geological Survey To Reevaluate Bakken Oil Reserves
  • 4 days Brazil Cuts Local Content Requirements to Attract Oil Investors
  • 4 days Forties Pipeline Could Remain Shuttered For Weeks
  • 4 days Desjardins Ends Energy Loan Moratorium
  • 4 days ADNOC Distribution IPO Valuation Could Be Lesson For Aramco
  • 4 days Russia May Turn To Cryptocurrencies For Oil Trade
  • 4 days Iraq-Iran Oil Swap Deal To Run For 1 Year
  • 7 days Venezuelan Crude Exports To U.S. Fall To 15-year Lows
  • 7 days Mexico Blames Brazil For Failing Auction
  • 7 days Norway Allows Eni To Restart Goliat Oil Field In Barents Sea
  • 7 days Malaysia Suggests Muslim Countries Stop Trading Oil In U.S. Dollars
  • 7 days Kinder Morgan Wins Appeal To Start Trans Mountain Work
  • 7 days Mexico Cancels Deepwater JV Tender Due To Lack Of Interest

Breaking News:

BP To Invest $200 Million In Solar

Alt Text

Nigeria Reforms Oil Sector To Draw New Investment

Nigeria has announced plans to…

Alt Text

China Set To Become More Dependent On Oil Imports

China’s already high dependence on…

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