North Dakota oil production swells as wells go back online

By Mike Hughlett, Star Tribune (Minneapolis) on

Published in Business News

North Dakota's oil output soared 14% in August as more wells shut down earlier this spring because of the coronavirus crisis came back online.

"It is nice to note that we are back on the road again to healthy production," Lynn Helms, director of North Dakota's Mineral Resources Department, told reporters Friday.

Still, Helms noted that while oil prices have been high enough to return wells to production, they're still too low to drill and frac new wells. So, while September's oil data is likely to show another increase, production will likely fall thereafter.

North Dakota, the nation's second largest oil-producing state after Texas, pumped out 1.16 million barrels per day, up from 1.04 million per day in July. In May, output hit a seven-year low of 858,400 barrels per day.

The state posted record oil production of 1.52 million barrels per day in November 2019.

With COVID-19 clamping the world economy, oil prices plummeted earlier this year as demand for refined products crumbled. Thousands of producing oil wells across the country were shut in.


Jet fuel demand "is still absolutely terrible," but gasoline demand has nearly recovered in the U.S., Europe and Asia, Helms said.

West Texas Intermediate (WTI) - the benchmark U.S. crude - fell from $63 per barrel in January to record lows last spring before leveling off to around $40 for much of the last three months. That's enough to return shut-in wells to production in North Dakota.

But "we have just about tapped out the return-to-production increases we will see," Helms said.

WTI needs to be around $45 before oil field operators start fracking - and thus putting into production - the state's many previously drilled wells, Helms said. (Fracking entails injecting a torrent of water, sand and chemicals into a well to flush out oil.)


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