Back-to-back blizzards in April led to one of the steepest ever monthly declines in North Dakota oil production.
North Dakota oil production takes a big drop
Production was down 20% in April, the biggest drop since the same month in 2020.
June 14, 2022 at 10:00PM
The state churned out 900,597 barrels of oil a day in April, down 20% from the previous month.
"The only word that comes to mind is, 'Wow,'" Lynn Helms, North Dakota's minerals director, told reporters Tuesday.
The month-to-month decline is topped only by the 30% production drop from April to May 2020 as COVID-19 battered the global economy and slashed oil demand, Helms said.
Two blizzards within a week in April knocked out electricity in North Dakota's oil patch, severely constraining production. Some operators lost 45 to 100% of their output at the time due to the storms, Helms said.
Difficulties getting production back online lasted well into May. "After the first of June, things got back to normal," he said.
North Dakota's natural gas production also got hammered in April due the storms, falling 19% from March, state data released Tuesday show.
Despite weather woes, North Dakota oil and gas operators — and the state's tax collectors — benefited from robust oil prices in April. West Texas Intermediate (WTI), the benchmark U.S. crude oil price, averaged $101.64 a barrel.
WTI on Tuesday was trading around $119 as global oil markets have been increasingly upended by the war in Ukraine and other supply constraints, coupled with growing petroleum demand.
Correspondingly, gasoline prices have skyrocketed over the past two weeks, standing at a record high — $4.76 a gallon on average — in Minnesota on Monday and Tuesday, according to AAA. The U.S. average price Tuesday was $5.03 a gallon.
Helms said that with strong oil prices, he expects North Dakota's oil production to increase 2 to 5% over the coming months.
The state's drill rig count, a harbinger of future oil production, has actually fallen this month to 37 from 40 in May. However, Helms called the drop an "aberration."
Insurance company CEOs ask the state’s congressional delegation for help extending enhanced tax credits via MNsure. The subsidies are set to expire at the end of next year.
