State mineral resources director Lynn Helms says he thinks the price for Bakken crude has hit bottom – but he’s expecting 2014 to be a soft year for oil prices.
Helms says the price in November was $71.42 a barrel. That recovered to $73 in December. He says while the price is improving, it’s improving slowly.
"There is a limit to light sweet crude refining capacity," said Helms. "So there's going to have to be some refinery builds and refinery conversions, and a re-ordering of the world market."
Helms expects prices to remain in the $75 to $85 range. He says that softer price will make the economics difficult for some counties in the oil patch.
"In particular, Billings, Divide and Golden Valley counties -- those are pretty close to break even numbers," said Helms. "For McKenzie, Mountrail, Williams and Dunn counties, the break even numbers are less than $40 a barrel. It should have little to no impact in those counties."
Helms says he expects more oil producers will use rail in 2014 – to ship the crude to where the best prices are. He says right now, the Cushing, Oklahoma hub has a glut of crude – and producers can get a better price on the East or West Coast.
