While North Dakota oil production remained steady in May, officials warned that the rate of growth for the rest of the year is not likely to be as strong as originally thought.

"I call this [month] 'stuck in the middle with you,' " Lynn Helms, director of the North Dakota Department of Mineral Resources, said in a conference call with reporters, describing the state's relatively flat output.

North Dakota, the nation's second-largest oil producer after Texas, pumped out 1.393 million barrels per day in May, up from 1.392 million barrels the previous month, an increase of less than 1%.

Natural gas output clocked in at 2.82 million MCF per day in May, down less than 1% from April, which was a record month for production. (An MCF is 1,000 cubic feet of gas.)

The number of oil-drilling rigs in North Dakota has fallen rather steeply after the last month, dropping from 63 in June to 58 currently. That's the state's lowest rig count — an indicator of new wells — since February 2018.

"We've heard warnings from [oil exploration and production] companies that they would be careful with spending for the remainder of the year," Helms said of the lower rig count. Those companies are "struggling to attract capital," he noted.

The expected complete closure of a large oil refinery in Philadelphia later this summer will be a negative for North Dakota oil producers, Helms said. "It will put [downward] pressure on North Dakota oil prices."

Philadelphia Energy Solutions, the largest refinery on the East Coast, suffered a huge fire in June. The refinery draws oil from North Dakota when the spread grows between Brent Crude — the global benchmark oil price — and the U.S. benchmark price, West Texas Intermediate (WTI).

When WTI falls relative to Brent, North Dakota oil can become more attractive on the East Coast than oil imports via tanker.

Mike Hughlett • 612-673-7003