The North Dakota millionaires rocking oil markets From JBC Energy on Monday: As the analysts note, the North Dakota production surge - which was under appreciated by the industry even as recently as this time last year - is beginning to have "profound" effects on the oil markets: The latest figures from the North Dakota Industrial Commission reveal another record production in the state of 942,000 b/d in October (see chart). This represents only a slight increase compared to the previous month (+1%) despite almost 200 additional wells and can partly be attributed to weather issues during the month. According to the same source, output should continue its upward trend over the coming period, yet the decline in oil prices is rendering drilling in some areas uneconomical. Nevertheless, the abundance of US shale oil is continuing to have a profound effect on markets. Last week, the US Energy Secretary noted that the US crude export ban may be outdated and could potentially be revised. However, the decision regarding whether crude exports should be allowed does not lie with the Department of Energy, although the agency has indicated it would be willing to provide support and analysis regarding this matter. Such a move, although not expected anytime soon, would benefit US refiners which are running out of flexibility to deal with the shale oil flood (see Benigni on Oil Markets, November). At the moment the bulk of the shale burden is being borne by US refiners, leading to a lingering WTI-Brent divergence. The possibility that the US may lift its export ban, however, could turn things around completely. While that's unlikely to happen any time soon, the power shift in global oil markets is already detectable. Saudi Arabia, for example, no longer appears keen to unilaterally weather the production cuts needed to stabilise prices. If Opec disarray leads to a price collapse (and another epic contango) that could provide an opportunity for anyone who is capable of bridging today's oversupply with tomorrow's ongoing demand, and/or has the ability to carry surplus crude cheaply until the moment the export ban is lifted. More than likely this will involve investment in yet more crude storage facilities in the US, as well as better capacity to turn crude into products which can be exported to external markets. Trafigura, in any case, (according to its recently published annual results) is preparing as follows: Trafigura is playing a pivotal role in this change, shifting its focus in the US from importing light crudes from West Africa to building capacity to store crude and export products to other countries. We have the scale, scope and agility to help petroleum product markets adjust as competitive products from the US Gulf Coast displace European refiners from traditional markets in Africa or as highly- efficient super-refineries come on-stream in Saudi Arabia and Asia. Related links: Trafigura shuns stock market float - FT Mind the WTI-Brent spread! - FT Alphaville The crude market in perspective - FT Alphaville The number of "income millionaires" in North Dakota nearly doubled last year, thanks to the state's shale oil prosperity -