Region's Producers See Sharp Drop in Oil Prices
While oil prices remain high elsewhere, prices in Montana, North Dakota and Wyoming have dropped dramatically in recent weeks to the surprise of independent producers.
"I have not talked to anybody who anticipated this," said Jack King, a Billings producer. "It just came on."
Cuts of up to $30 a barrel off the posted regional prices are being reported in the Williston Basin, which straddles the northern portion of the Montana-North Dakota border and includes the productive Bakken Field near Sidney. Elsewhere, crude oil is trading for nearly $60 a barrel.
"This is sending seismic shock waves through the Northern Rockies," said Tom Hauptman, a Billings oil and gas producer. "Some are being told we don't want your product. The posted prices are being discounted by $20.45 a barrel."
According to the Rocky Mountain Oil Journal, March 1 prices for West Texas intermediate oil were $58.75 a barrel, while Wyoming sweet was selling for $33 a barrel.
Ron Ness, president of the North Dakota Petroleum Council, said oil has dropped up to $28 a barrel in Bowman County. He said the price decline began about two months ago.
Some producers are shutting down wells rather than sell oil at the reduced rate.
Ness said there are about 35 drill rigs operating in North Dakota.
"Some companies are second-guessing their investment decisions," Ness said. "We don't want to see those investment dollars shy away from the basin."
Producers aren't sure what's behind the pricing discounts but say factors may include the country's static refining capacity, increased production in the Canadian Tar Sands and limited capacity on pipelines.
Cole Chandler of Havre said the problem is a supply-and-demand issue, and it's growing. "It began about three weeks ago as a local problem (in the Williston Basin), but it has spread regionally," he said.
Chandler is operations manager for Klabzuba Oil & Gas and president of the Montana Petroleum Association. Its board of directors met in Billings Thursday and appointed a committee to investigate the price drop.
"While there are price differentials elsewhere, we're trying to determine why the Rocky Mountain region is being affected like this," said Robert Fisher, a senior vice president of Ballard Petroleum Holdings of Billings. "We need the facts."
GrandForks
"I have not talked to anybody who anticipated this," said Jack King, a Billings producer. "It just came on."
Cuts of up to $30 a barrel off the posted regional prices are being reported in the Williston Basin, which straddles the northern portion of the Montana-North Dakota border and includes the productive Bakken Field near Sidney. Elsewhere, crude oil is trading for nearly $60 a barrel.
"This is sending seismic shock waves through the Northern Rockies," said Tom Hauptman, a Billings oil and gas producer. "Some are being told we don't want your product. The posted prices are being discounted by $20.45 a barrel."
According to the Rocky Mountain Oil Journal, March 1 prices for West Texas intermediate oil were $58.75 a barrel, while Wyoming sweet was selling for $33 a barrel.
Ron Ness, president of the North Dakota Petroleum Council, said oil has dropped up to $28 a barrel in Bowman County. He said the price decline began about two months ago.
Some producers are shutting down wells rather than sell oil at the reduced rate.
Ness said there are about 35 drill rigs operating in North Dakota.
"Some companies are second-guessing their investment decisions," Ness said. "We don't want to see those investment dollars shy away from the basin."
Producers aren't sure what's behind the pricing discounts but say factors may include the country's static refining capacity, increased production in the Canadian Tar Sands and limited capacity on pipelines.
Cole Chandler of Havre said the problem is a supply-and-demand issue, and it's growing. "It began about three weeks ago as a local problem (in the Williston Basin), but it has spread regionally," he said.
Chandler is operations manager for Klabzuba Oil & Gas and president of the Montana Petroleum Association. Its board of directors met in Billings Thursday and appointed a committee to investigate the price drop.
"While there are price differentials elsewhere, we're trying to determine why the Rocky Mountain region is being affected like this," said Robert Fisher, a senior vice president of Ballard Petroleum Holdings of Billings. "We need the facts."
GrandForks
posted by Ottawa Gas Prices | 1:22 PM
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