Many experts were pointing out that the oil boom is temporary phenomena and people shouldn’t rely on the cheap prices. But looks like this temporary phenomena is going last for a long period now. The North Dakota’s shale oil reserves are concentrated at rig in the Williston Basin. The rig just started yielding crude oil and the company is drilling for more production for the first time in the five months.
The rig is being operated by Baker Huges Inc as a field services contractor at the Permian Basin, the largest oil play in the United States. EOG Resources Inc and Pioneer Natural Resources CO. were among other shale explorers in the region. As the area is yielding more crude oil, both companies are planning to restart their exploration efforts and go deepest. For a long time, the U.S. oil drilling efforts were almost absent due to low oil prices. Due to super low prices, the number of active oil rigs was decreased by 50 percents.
As we all know, the crude oil prices dipped down around 49 percent last year as the countries like the US flooded the oil market with massive shale oil production. The rates remained somewhere around $60 a barrel. The prices are recovering now as production as slowed down but now sudden action in the oil rig is threatening the recovery in the oil prices. The head of Commodity markets, Harry Harry Tchilinguirian from London Based BNP Paribas informed that people are inviting more oil supply in the market. The natural effect of this as per demand supply law is going to be reduction the prices.