North Dakota's oil production saw a 5.4 percent increase from March to April and is close to a record set during the oil boom in 2014.
The second-largest oil-producing state, North Dakota pumped out 1.22 million barrels per day in April, about 2,500 barrels shy of the state's high-water mark, according to state data released Friday.
"We were not expecting that kind of production until late May or early June," Lynn Helms, director of North Dakota's Department of Mineral Resources, said in a conference call with reporters.
Natural-gas production in North Dakota was even stronger in April, increasing 5.7 percent and setting a new monthly record.
U.S. oil output generally has been robust this year. Global economic growth has been relatively strong, underpinning oil demand. Meanwhile, oil prices have been rising, increasing potential profits for oil producers.
In May, West Texas Intermediate — the benchmark U.S. crude price — topped $70 a barrel, hitting heights not seen in over three years. However, prices have retrenched in the past three weeks, dropping again Friday by more than $2 and closing at $64.37 barrel. Russia and some members of OPEC — which meets next week in Vienna — have signaled they want to increase output.
North Dakota officials expect strong oil production this summer, with the 2014 monthly output record falling at some point. Still, the state is grappling with structural constraints on production.
Oilfields in North Dakota and much of the country are short of workers, as a strong economy has tightened labor markets.
"Until a qualified workforce shows up at the state's job fairs, we will be restricted in how much production will grow," Helms said.
Also, North Dakota's natural-gas production — which goes hand in hand with oil production — is getting ahead of the ability to process the stuff. When gas can't be processed, it is flared, and North Dakota is already close to its state-mandated flaring limits.
New gas processing plants are in the works, but they won't be fully online for another six months. "Gas capture is going to be very challenging for the industry," Justin Kringstad, director of the North Dakota Pipeline Authority, said in a conference call with reporters.
As for North Dakota's drilling rig count, it currently stands at 62, as it was in May.
