The importance of the oil industry to the North Dakota economy is well known. We looked at production and prices in the past. I thought a look at estimated revenue was in order. This is simply the product of average monthly price and the monthly production. Clearly it is an approximation, but it is likely a good overall approximation for industry revenue in North Dakota right now. If a picture is worth a thousand words, let’s start talking:

Revenue levels dropped back to levels from around 2010. Considering the expansion of that sector over the last ten years, this can rightly feel like a lost decade of growth. The fact that employment is down too does not instill tremendous confidence for an immediate turnaround. The good news? There is a bit of a recovery. In fact from May to June the estimated revenue for the industry increased 100%. The bad news is that is still a 60% decline from the level in January.

The keystone nature of the oil industry at this time in North Dakota makes it important to understand the direction for this sector. It may be on the rise, though risks continue, especially with uncertain global demand and issues between OPEC parties. The volatility of this sector will continue to drive the state economy overall for at least the near term. Beyond that it is up to policy at state, national, and global levels, and innovative activity in the state to reduce the volatility.