Starting tomorrow North Dakota lawmakers will be in a special session for most of the week to address a hole blown in the state budget by the decline in oil activity in the state. But as they go about their business, there are some signs that we may be through the worst of it.
The folks at UPI have been breathlessly reporting every minute change in North Dakota’s rig count every Monday for years now, but their headline today about the count continuing to rise does describe a real trend.
Albeit a modest one.
I’ve been tracking the weekly rig count since the beginning of the year (though I missed a few weeks here and there, sorry) and it does seem that the rig count has not only hit bottom but actually seems to be climbing a bit right now:
It’s worth nothing that the state’s revenue forecasters – though they’ve had a troubling propensity for inaccuracy – are more bullish on revenues from oil activity. In the July 2016 revenue forecast released to lawmakers they upped their prediction for oil revenues (last updated in January) by more than $437 million:
To add some anecdotal evidence, consider that last week the Board of University and School Lands was told that grants for schools and law enforcement agencies, etc., etc. made from the Oil and Gas Impact Grant Fund which had previously been suspended could be restored thanks to a rebound in oil revenues.
Good news, to be sure.
Of course, I need not lecture you readers about the volatility of the oil markets. This might not be a real recovery, modest as it is. It could just be a sort of dead cat bounce.
But I am inclined to think that this is rock bottom. In which case the “oil bust” some, for reasons having to do with partisan politics and/or sensational headlines, have been touting might not ever really materialize.
Either way, lawmakers should probably enter this special session with a mind toward preparing the state for a continued oil tax revenue rout.