If state records are accurate when measured against industry data, the rig count in North Dakota gained significant ground after a weekend OPEC agreement.
North Dakota, the No. 2 oil producer in the United States, serves as a relatively good metric to gauge industry sentiment as it provides rig numbers on a daily basis. Rig counts themselves provide a loose barometer as they indicate activity in the exploration and production side of the energy sector, though rig counts don't necessarily equate to expected gains in output.
Nevertheless, state data could indicate the appetite is building. State data show 40 rigs actively exploring for or producing oil and natural gas as of early Monday morning. If both sets of data are aligned, that would be a 25 percent increase over what oilfield services company Baker Hughes reported Friday.
There may be discrepancies as the state reported 38 rigs in service Nov. 11, which would suggest only a slight increase in activity. The state reported crude oil production in September, the last full month for which data are available, at 971,658 barrels per day on average, far below the all-time high of 1.2 million bpd reported two years ago.
The state government last month blamed lower crude oil prices for the decline in output. The price for West Texas Intermediate, the U.S. benchmark price for oil, is up 23 percent, or roughly $10 per barrel, from one month ago. WTI was trading up about 4 percent in early Monday trading.
Crude oil prices are rallying on the back of a series of agreements reached between members of the Organization of Petroleum Exporting Countries and non-member states to hold production at a certain level starting in January.
That deal has brought crude oil prices to a point where some companies are re-engaging in some of the U.S. oil deposits constricted by a weak market early this year. Based on a low-end estimate of $50 per barrel for WTI, S&P Global Platts said in an emailed report that some U.S. oil producers are expected to reap the rewards of the OPEC-fueled rally in oil prices.
