Reuters is reporting:
Oil production in
North Dakota's Bakken shale stayed flat in January after falling
sharply the month before, according to independent data that illustrate
how this winter's bitter cold put a freeze on the world's
fastest-growing oil patches.
Although December's
extraordinary chill gave way to relatively warmer weather last month,
Bakken output hovered just below 860,000 barrels-per-day, according to
calculations by LCI Energy Insight, a Texas-based energy intelligence
firm.
In December, Bakken oil
production fell by nearly 50,000 bpd from a record just over 910,000 bpd
in November, the largest drop since state records began, according to
North Dakota Industrial Commission data this month.
The
LCI figures, based on historical well production data and natural gas
pipeline flows in North Dakota and Montana, are the first to show the
full impact of winter weather on oil output, a trend that brought new
seasonal uncertainty to oil markets in recent years.
Growth
in the larger Eagle Ford shale in south Texas also ground to a halt at
around 1.1 million bpd, according to the LCI data, which was made
available to Reuters.
Parts of North Dakota had the third coldest
December on record, so frigid, according to local papers, that diesel
fuel froze in truck tanks. In January, it was the wind that forestalled
the drilling and hydraulic fracturing operations that are necessary to
keep output growing.
"December was
very cold and January was warmer but windy," said Bill Abeling, a
meteorologist with the National Oceanic and Atmospheric Administration
in Bismarck, North Dakota. Peak wind speeds were above 35 miles per hour
for a third of the month in Williston, the heart of the oil boom,
Abeling added.
Although companies
often cut back on fracking operations during the winter months due to
operational issues, the impact was greater this year due to the severe
conditions.
In addition, the
weather in the northern Midwest state is wielding a greater influence on
the oil market, forcing oil traders to adjust to a new dynamic. U.S.
oil markets cannot overlook the loss of 50,000 bpd of Bakken crude just
as winter heating fuel demand peaks, traders say.
Still,
it is likely to be a temporary lull in the otherwise upward trajectory
of the Bakken region, whose bounty turned North Dakota into the
country's No. 2 oil-producing state. Regulators expect the backlog of
wells waiting on completion, numbering 635 in December, to be up and
running by May.
This is the first of three pages; to see the rest, go to the linked story.
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