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Daily oil production falls to record low in latest report

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North Dakota’s daily oil production fell below a million barrels in May, for the first time in three years.

It’s the lowest number in seven years, according to the latest report from the state Oil and Gas Division released today.

Department of Mineral Resources Director Lynn Helms says the drop was not surprising, but the magnitude of it was.

Rig counts have seen an 82 percent decrease since January. In April, there were 35, and as of today, there are 11.

Helms says between the pandemic, the recent OPEC agreement, new NEPA rules and the DAPL shutdown, everything was shaken up this year.

The U.S. Energy Information Administration, or EIA, predicts oil prices will be restored in a year. Helms says, “That’s a little optimistic”, adding, he believes the industry will see a permanent loss of demand.

“We have a plan. We call it the Legacy Fund. It was built on the idea that, ultimately, either world demand for crude oil would peak or North Dakota production would peak, and then begin to decline. The Legacy Fund isn’t large enough yet to really deal with that,” he shared when asked how the state is preparing.

Helms says there will be a big discussion of shifting spending priorities during the next upcoming legislative session to be able to fund state government going forward.

He also projects the state will be back up above a million barrels for July.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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