North Dakota hit by falling oil prices

Crude truth behind oil's global boom
Crude truth behind oil's global boom

The oil rigs in North Dakota are vanishing, a sign that the slide in oil prices is taking a big toll.

There are now only 68 rigs operating in the state, down 65% in the past year, according to state figures.

For now, North Dakota is still producing plenty of oil -- little changed in recent months at about 1.2 million barrels a day.

But the sharp decline in further exploration is cutting into jobs and the state's tax revenues.

The number of mining and logging jobs in North Dakota, a category that includes oil field workers, has dropped by 3,700, or 12%, since March. That accounts for about half the job losses in the state in that period. The oil boom had created a job boom in North Dakota, and the unemployment rate in the state is still incredibly low at 2.9%.

Tax revenues in the state in August were 20% below forecasts, a $47.4 million shortfall. Sales tax collection is 33% below forecasts, and taxes to register cars and truck came up 20% short.

Related: Low oil prices put $1.5 trillion of projects at risk

North Dakota has been a major source of new oil that has led to record U.S. oil production. That increase in U.S. supply has contributed to the slide in global prices.

The price of oil is down to $45 a barrel, less than half the price of a year ago.

Typically OPEC responds to drops in oil prices by trimming its own production but that hasn't happened this time. Also pushing prices down is anticipation future supplies of Iranian oil due to the recent deal on that nation's nuclear weapons program. There has also been slugging consumption due to the slowdown of economic growth in China and Europe and the greater use of more fuel efficient vehicles.

Related: Low gas prices may doom Social Security raise

Are you someone who went to North Dakota during the oil boom but now plan to leave because of the downturn in jobs? If so please email Chris Isidore with your story.

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