A recent bout of bad weather has slashed oil production in North Dakota by almost 80 percent, and restoring the lost output could take several days. North Dakota, home to part of the Bakken shale formation, is the third-largest oil-producing state in the United States, with a daily production of 1.1 million barrels.
The situation is temporary, but today's volatile market is acutely aware of any production outages, particularly in the United States. North Dakota's loss of roughly 800,000 bpd has caused oil prices to climb even higher at an inopportune time when global oil prices are already high. The U.S. oil industry has come under fire recently for its slow post-covid production increase.
According to Katie Haarsager, spokesperson for the North Dakota Oil and Gas Division, the extreme weather has caused road blockages with snow and ice. This has hindered the ability of oil companies to reach their production sites and has damaged their electrical infrastructure.
Ron Ness, president of the North Dakota Petroleum Council, is hopeful that most of the production can resume by this weekend. "The situation is improving quickly each day," Ness said, according to Reuters.m
Prior to the storm, the EIA expected North Dakota's production from the Bakken to rise to 1.2 million bpd next month.
In February of this year, North Dakota was producing 1.09 million bpd. The final numbers for April's production will not come in until June, but the industry expects it to be a bad month. North Dakota's pre-pandemic peak oil production was 1.5 million bpd.
By Gandhari Cooray for Oilprice.com
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