As OPEC members dutifully hold back on oil production, American producers are stepping in to fill the gap in production left by the cartel. Oil boom-bust areas like Williston, North Dakota, which was hit hard by the drop in oil prices, are now booming once again. If America has become the new swing producer in oil markets, OPEC will have trouble getting a firm grip on oil prices ever again. NPR reports on the boom in oil country:
There are more than twice as many U.S. rigs drilling for oil as a year ago, a turnaround that’s felt keenly in places like the Bakken oil patch in North Dakota. Cigarettes and chewing tobacco are flying off the shelves of the gas station Angela Neuman manages in the town of Williston.
“Now there are so many new people, I cannot get a handle on that,” she laughs.
A year ago the price of oil was so low that it made drilling less profitable. Production dropped and companies in North Dakota and elsewhere made painful layoffs.
Across Williston, at the Winterton Suites hotel, sometimes there was only a guest or two, and the price plunged from $300 a night to the bargain rate of $100.
“We almost actually thought we were going to lose it for a little bit,” says Winterton’s manager Chelsey Crozier.
Occupancy has ticked back up this spring.
“Of course, [it’s] not as crazy as it was,” she says, “but it’s doing better.”
In the dizzying boom-bust cycle of the oil industry, things were crazy busy here a few years back, when a barrel of oil was around $100. But that led to a surge in production that flooded the market, pushing the price of oil down. That’s when OPEC stepped in to boost prices by cutting its own production, and Russia followed suit.
“Effectively, these cuts that were put into place last fall are being filled in by other countries,” including the U.S., says Eugene Graner, with Heartland Investor Capital Management in Bismarck.
U.S. production has risen to 9.3 million barrels of oil per day, close to the level before prices plummeted.
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