Oil Prices Drop | Video

Jennifer Joas | 6/19/2012

Oil drilling in North Dakota has taken off because of hydraulic fracturing. It seems like virtually nothing can stop the development. However, the the price of oil could and that price is quickly dropping.

The price of crude oil has been on a steep decline since March, and shows no sign of stopping. Since April, the price has dropped $20 a barrel and is now sitting at $84 a barrel. That price may may keep falling.

Analysts say there are several reasons for the decline.

"The European crisis, the fact that we now are seeing an over-production of oil in the United States. It`s the refining capacity that is more in shortfall," said Heartland Investor Services President Eugene Graner.

Graner says other contributing factors to the falling price are the increasing value of the U.S. dollar and the fact that the country isn`t at war.

The price decline could slow down North Dakota`s oil production if it slips down into the $60 range.

"That would probably give that needed slowing down time anyway for the infrastructure to get caught up. So is it a bad thing? It`s a bad thing for those that own mineral rights that want to see them produced. But it`s not necessarily a bad thing for the people of western North Dakota just to get a chance to catch up," Graner said.

Graner predicts prices will continue dropping through July. He says the only thing stopping that would be a hurricane shutting down refineries in the Gulf of Mexico.

The drop in crude oil prices could also influence gas prices, causing gas to drop to a national average of $3.29 by the fourth of July.

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