As I write this WTI prices are hovering right at the $40 a barrel mark, and I fear where prices might end up if that magical $40 barrier is broken. CNBC yesterday had an online post suggesting that we could see $26 oil soon.
At this point, I think most people are relatively pessimistic about prices in 2016 (or at least the first half of 2016). Recognizing that geopolitical events could always change the equation (though we note the bombing in Syria and the terror attacks in Paris apparently did not impact prices), to the extent the old factors of supply and demand impact prices it is hard to see how things get much better very soon.
North Dakota reported this week that oil production in the state fell by 25,000 barrels of oil per day in September 2015. Further, the active number of producing wells in the state fell for the first time since 2003. Good news, right? Not so fast.
Despite the decline in production, North Dakota's oil production remains in excess of a million barrels of oil per day. In addition, there are now nearly 1,100 drilled but not completed (i.e., fracked) wells in the state.
Overall, we are with Ron Ness, president of the North Dakota Petroleum Council, who was quoted as saying: "I think it's going to be a pretty tough first and second quarter of 2016, ..."
Happy Friday everyone!
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