North Dakota Oil Production Doubles in Past 2 YearsBISMARCK, N.D. (AP) — North Dakota oil production has more than doubled in the past two years, and the state's sweet crude is now helping to feed refineries on the East, West and Gulf coasts.
By: JAMES MacPHERSON, Associated Press
BISMARCK, N.D. (AP) — North Dakota oil production has more than doubled in the past two years, and the state's sweet crude is now helping to feed refineries on the East, West and Gulf coasts.
State records show North Dakota oil drillers produced an average of about 558,000 barrels daily in February, up from 348,000 last year and 262,000 barrels in February 2010.
The state had 6,726 producing wells in February, or nearly 2,100 more wells than in February 2010, and 1,400 more than last year.
February statistics are the latest available because oil production numbers typically lag at least two months.
The average price for a barrel of North Dakota sweet crude between has increased more than $15 to about $83 over the last two years. But crude oil from the state's rich Bakken and Three Forks formations is trading up to 25 percent less compared to West Texas Intermediate, the U.S. benchmark.
Oversupply at Cushing, Okla. — the delivery point for benchmark WTI — and the lack of pipeline capacity in North Dakota increasingly has producers shipping product by rail to East, West and Gulf coast refineries. In those markets, shippers are fetching premium prices comparable to Brent crude, the global benchmark used in pricing oil imported by U.S. refineries, said Justin Kringstad, director of the North Dakota Pipeline Authority.
Kringstad says 25 percent of the state's oil production is moving by rail to primarily to coastal refineries. Two years ago, only a small percentage of the state's crude was moving by rail.
In addition to Oklahoma, Texas and Louisiana, North Dakota crude began moving by rail last year to Washington state and New York, where it's transferred by barge to Pennsylvania. In recent weeks, crude shipments have been sent west by rail to California, Kringstad said.
"Instead of buying barrels of waterborne foreign oil, people are beginning to look inland, where the prices are lower to feed those refineries," Kringstad said.
Copyright 2012 The Associated Press.