Sinking prices chill America’s oil patch
WILLISTON, N.D. – Oil has averaged $96 a barrel over the past four years, fueling more drilling, more hiring and bigger appetites in North Dakota, Texas, Oklahoma and elsewhere. Now oil has hit a rough patch, plunging to $79 from $107 in June on fears of a global glut. Many expect these lower prices are to stick around for a while.
Lower oil prices, while good for the broader U.S. economy, are a threat to what has been a surprising and dramatic surge in oil production in the U.S. and to drilling communities that have come to depend on oil money.
Drilling in fields that aren’t very prolific will stop because it won’t be profitable. For example, drillers in North Dakota’s Burke County need $81 a barrel on average to break even, according to the Department of Mineral Resources, while the price is just $28 in McKenzie County, the state’s top oil producing county.
U.S. oil production has gone up by 3.5 million barrels per day, or 70 percent, since 2008. High prices fueled the boom, providing oil companies the profits and investor cash to buy up land, pay for drilling rigs, and develop new technology.
U.S.: Rebel Ukrainian vote a ‘sham’
WASHINGTON – The United States is condemning rebel-organized elections in eastern Ukraine as a sham and chiding Russia for supporting them.
White House spokeswoman Bernadette Meehan says the elections held Sunday violated Ukraine’s constitution and basic electoral standards.
Meehan says both Moscow and pro-Russian rebels in Ukraine had agreed to local elections to be held under Ukrainian supervision, as part of a truce reached in Minsk in September. She says Sunday’s elections violate that deal, too.
The White House says it’s concerned Russia is trying to legitimize Sunday’s vote and isn’t abiding the Minsk accord. The U.S. is calling on Russia to withdraw forces from the border with Ukraine or else face rising penalties.
Rebel leaders in Donetsk and Luhansk won easy victories in Sunday’s vote, and Moscow has offered warm support.
Associated Press
