North Dakota oil prices are near breakeven levels, the state’s oil and gas regulator said on Tuesday, as a global trade war has stoked concerns of a recession and roiled energy markets.
North Dakota is the third largest oil-producing state in the U.S., but its maturing oilfields require a higher oil price to turn a profit than other areas, such as the Permian basin.
Operators in the state’s Bakken shale face breakeven prices in the range of $50-60 a barrel, said Nathan Anderson, director of the state’s Department of Mineral Resources, while noting that breakeven varies based on formation and the technology a company uses for drilling.
Breakeven costs in the Permian Basin of West Texas and New Mexico range between $38 and $42 a barrel, while operators in Powder River in Wyoming face up to $58 a barrel breakevens, according to research firm Wood Mackenzie.
The U.S. West Texas Intermediate crude contract closed on Tuesday at $64.32 a barrel, up 2% on the day but roughly $7 below April 2, when U.S. President Donald Trump unveiled sweeping trade tariffs.
Bakken oil delivered at Clearbrook, Minnesota, was pricing at an 80-cent-per-barrel discount to West Texas Intermediate on Tuesday, consistent on the month, the state regulator said.
“It is likely that as prices dip into the low $60s that companies are probably going to service providers asking for cost reductions,” Anderson said.
The North Dakota rig count was last at 32, steady on the month.
But two rigs could be dropped in 2025 as part of normal planned budget decisions that were made prior to the recent price dip, Anderson said.
There are currently 13 active frac crews in North Dakota, consistent with January and February, the state regulator said.
“I expect prices to rebound once sanctions and tariffs are better understood by operating companies,” Anderson added.
North Dakota oil production fell by 11,000 barrels per day in February compared with January, falling to 1,164,000 bpd, the state regulator said, pointing to extreme cold during the month that hit production.
(Reporting by Georgina McCartney in Houston; Editing by Liz Hampton and Leslie Adler)