WILLISTON, N.D. – Oil prices in North Dakota have reached historic lows, but not quite as low as some national headlines portrayed this weekend.
A story that appeared on Bloomberg.com with the headline "The North Dakota crude oil that's worth less than nothing" referred to Friday's price for North Dakota sour crude as -$.50 a barrel, as posted by Flint Hills Resources.
But on Tuesday, Flint Hills Resources spokesman Jake Reint said the negative price was an error. It should have said $1.50 a barrel, Reint said.
Either way, a low price for North Dakota sour crude has little significance for the state, said Eugene Graner, president of Heartland Investor Services in Bismarck.
That's because North Dakota sour crude is a lower quality crude oil with a high sulfur content, much different from the light, sweet Bakken crude oil that makes up a majority of the state's oil production.
Sour crude accounted for less than 1 percent of North Dakota's total oil production in November - about 7,400 barrels per day out of the total 1.18 million gallons of oil produced that month, the Department of Mineral Resources said.
"It's a great headline. It would make the average person in North Dakota think, 'Oh my god, oil in North Dakota doesn't have any value anymore,' " Graner said. "No, it's because we don't produce sour crude anymore."
The small amount of sour crude that was produced in November came from 754 wells in Bottineau and Renville counties.
The price of North Dakota sour crude did get down to $.50 last Tuesday, according to the Flint Hills benchmark price.
Operators with those wells, as well as others in North Dakota that have marginal production, are shutting in wells due to low prices, Graner said.
"They're going to shut the well off. They're not going to lose money," he said.
North Dakota had 13,077 total producing wells, down from 13,190 wells in October, an indication that operators were shutting down wells with marginal production, Lynn Helms, director of the Department of Mineral Resources, said last week.
The most significant oil price for the state is the price of North Dakota sweet crude, which Flint Hills listed as $18.25 Friday.
Graner said he anticipates the price will stay around $20 but see increases in a few months, in part due to an increase in seasonal demand and a reduction in the domestic oil supply.
"By the summer months, we'll be back in the mid-30s to low 40s," Graner said.