North Dakota drillers finish wells faster as crude prices climb

what happened

Oil and gas producers in North Dakota, the country's third-largest crude-producing state, are finishing wells faster and lifting output, state officials told Reuters. The main motive is high crude prices. Richard Suggs, a geologist with the state's Oil and Gas Division, said: “Operators are acting more quickly to move wells to production to capitalize on elevated oil prices.”

The time needed to prepare a well for production has dropped by roughly half since the start of the year. Producing wells hit a record 20,177 in August, and oil output rose by 3,000 barrels per day to 1.161 million bpd. The state now has 36 drilling rigs running and eight fracking crews active.

The price gap between US West Coast and East Coast refiners has widened noticeably. In July, West Coast buyers paid about $93.51 a barrel for North Dakota crude, while East Coast buyers paid $88.27, even though the usual difference is 50 cents to $1. Justin Kringstad of the North Dakota Pipeline Authority linked the spread to disruptions in waterborne imports, Gulf Coast supply and rail flows to the East Coast.

why it matters

WTI traded near $102 a barrel on the day of the report, and North Dakota crude averaged a $4.21 discount to it through August. Extra supply from the state weighs on the balance, while refinery utilization above 80% points to steady demand. The wide coastal spread matters for refiners' margins.

market impact

WTI and US refiners: faster well completions add supply, while the wider coastal spread shifts refining margins

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