BISMARCK, N.D., May 9 (UPI) -- The number of rigs operating in North Dakota was down two from the previous week and nearly 70 percent below this time last year, state data show.
North Dakota state data show 27 rigs in service, a loss from the previous week's count of 29, which held steady for much of the month of April. The count for Monday is 67 percent below the same date last year and 87 percent below the count for this date in 2012.
The slump comes despite a rally in crude oil prices, which are up dramatically from lows below $30 per barrel early this year. North Dakota is the No. 2 oil producer in the United States, but Gov. Jack Dalrymple last week said it was time to develop a budget that was about 90 percent of the 2015-17 appropriation.
In a statement, the governor said there are revenue challenges emerging for a state at the heart of the U.S. oil boom. Tax revenues, however, are falling short and the budget situation in the state is much different than it was two years ago when oil was selling for more than $100 per barrel.
"No one could foresee the extent to which commodity prices would fall after the legislature adopted the current budget," he said.
The state oil and gas division releases monthly data later this week. In the latest report, Lynn Helms, director of the North Dakota Department of Mineral Resources, said energy companies working in the state would be "running the minimum number of rigs" in part because of the pressure from lower crude oil prices.
Oil remains under pressure, albeit weakening, from a market tilted toward the supply side as demand falters in a lackluster global economy. Weak figures from the U.S. Labor Department dragged on oil prices last week, though Canadian wildfires have inflated the market in recent days.
Oil production in North Dakota as of February, the last full month for which the state has data, was 1.1 million barrels per day, down about 0.3 percent from January and nearly 9 percent below the all-time high recorded in December 2014.
