Jan. 14 (Bloomberg) -- Bakken crude on the spot market strengthened to the highest level in six months relative to West Texas Intermediate because of bad weather that probably slowed production growth.
Bakken crude at a storage hub in Clearbrook, Minnesota, gained 75 cents to a $1.75-a-barrel discount below WTI at 3:56 p.m., according to data compiled by Bloomberg. It’s the smallest differential since July 12.
Cold weather in December and early January made it difficult for drillers to keep pace with production growth in the North Dakota portion of the Bakken formation, Lynn Helms, director of the state’s Mineral Resources Department, said on a conference call today. Output has risen by nearly 900,000 barrels a day from the start of 2007 as producers use directional drilling and hydraulic fracturing to coax oil and gas from underground shale.
“We may struggle to hold even,” Helms said. “Hydraulic fracturing was an enormous problem during the month of December. It was difficult to move and heat the frac water.”
Preliminary production numbers for December won’t be released until mid-February. North Dakota Bakken production grew by 28,280 barrels a day to 908,380 in November, according to the state.
“November was a nice month with warm weather,” Helms said. “We expected a significant surge in production and we got it.”
About 71 percent of the oil produced in North Dakota has shipped out by rail in November, according to state data. About 22 percent was transported by pipeline, with the rest being used by the state’s only refinery or sent by truck to Canada.
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