North Dakota Crude Output to Increase as Operators Restart Wells

North Dakota crude output is expected to rise as operators restart inactive wells and higher oil prices support increased activity heading into spring.

(Reuters) — North Dakota crude output is expected to rise in March and the following months as operators in the third-largest oil-producing state restart inactive wells and winter restrictions are eased, the state's regulator said on March 19.

The North Dakota Department of Mineral Resources said, however, that the pace of activity would depend on how long oil prices stay high and that oil majors' budgets have already been set.

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Oil prices have surged since the U.S. and Israel attacked Iran on February 28, with U.S. West Texas Intermediate crude touching a nearly four-year high of $119.48 on March 9.

On March 19, the discount for WTI versus Brent, the global oil benchmark, traded at its widest since 2013 following a release of oil from the U.S. Strategic Petroleum Reserve that boosted supplies, while Brent rose in response to attacks on Middle Eastern energy facilities.

Wells are considered inactive if they do not report production for three months. North Dakota had 2,835 inactive wells and 19,244 producing wells in January.

"Most likely the operators, being mega producers in the state, have long-term budgets and decisions on operations. I don't foresee them making rapid changes until there's a price stabilization and supply is known, at which time, then they'll most likely adjust accordingly," Justin Kringstad, executive director at the North Dakota Pipeline Authority, said.

Oil production in North Dakota fell by 1,000 barrels per day to 1.12 million barrels per day in January, according to the department's latest data. The hydraulic fracturing crew count in North Dakota stands at eight, unchanged from February, but that should increase slightly once the weather warms, the regulator said.