Shares of Whiting Petroleum Corp , Continental Resources Inc and other top crude oil producers in the Bakken shale formation plunged on Thursday after the U.S. government said oil produced there may be extra flammable. The warning came three days after a BNSF train carrying crude oil collided in eastern North Dakota with another train carrying grain.
The resulting explosion led to the temporary evacuation of a nearby town and added to the growing concern about the safety of oil-by-rail shipments. Last July a runaway oil train, which originated in North Dakota, derailed and exploded in a small Quebec town, killing 47 people.
Oil extracted from the Bakken, a vast rock formation underneath North Dakota and Montana, "may be more flammable than traditional heavy crude oil," the Pipeline and Hazardous Materials Safety Administration, part of the U.S. Department of Transportation, said on Thursday.
Whiting & Continental, the largest Bakken producers, saw their shares fall more than 3.5 percent after the announcement. Shares of Oasis Petroleum Inc, Kodiak Oil & Gas Corp and Northern Oil & Gas Inc saw similar drops.
Crude oil prices also fell, contributing to the decline. The U.S. government's warning should come as no surprise considering refineries and other oil buyers value the high energy content of Bakken crude oil, said Ron Ness, the head of the North Dakota Petroleum Council, a trade group for oil producers. "I don't think there's any surprise that Bakken crude oil is the highest quality crude oil available and it has more of those high-end components that you're looking for in a top-shelf crude oil," Ness said.
A Watershed Decade?
I started out the day reading about the legalization of marijuana in Colorado with expectations that before the decade is out, marijuana will be legal across the United States.
At midday I read more about the Obamacare debacle.
At dusk I read that more than half of the women in the US Marines were unable to pass the new physical fitness plan as part of the process to move women into combat positions. The women were unable to do three pull-ups, the minimum required. [From wiki: The minimum a 17 to 26 year old male Marine must complete are 3 pull-ups, 50 crunches, and a 28 minute 3-mile run.]