North Dakota losing more rigs

The number of rigs in active service in North Dakota, the No. 2 U.S. oil producer, declined from last week despite the recovery in crude oil markets.

State data show 35 rigs in active service in the shale-rich state, down nearly 8 percent from the 38 recorded one week ago. The all-time low point is zero and the current rig count is 70 percent lower than one year ago and 83 percent below a recent peak of 204 posted March 7, 2012.

Lower crude oil prices mean energy companies have designated less capital for exploration and production activity during the first quarter. Continental Resources, one of the larger stakeholders in the regional Bakken shale oil play, said spending for the year would be about 60 percent lower than last year.

Crude oil prices are up about 8 percent for the year as supply-side pressures start to ease. Markets are significantly weaker than last year, however. Oil field services company Baker Hughes reported a U.S. rig count of 502 for the week ending Feb. 26, down 12 from the previous week.

Recent analysis from energy reporting group Platts found oil production from the Bakken play in North Dakota was down 1 percent from December, continuing a marginal decline the group said started during summer 2015.

Sami Yahya, an energy analyst for Platts, said January oil production in the North Dakota's Bakken reserve area was around 1.2 million barrels per day, about 3 percent lower than last year. Drillers, Yahya said in an emailed report, are starting to tap into their inventory of drilled, but uncompleted wells, which are cheaper to complete than new wells.