North Dakota's oil and gas production climbed in March, sparked by high energy prices that are a boon to the state's tax coffers.
But those same high oil prices are keeping U.S. gasoline prices historically high. In Minnesota, gasoline prices Friday were at $4.10 a gallon, according to AAA.
While that's not a record, average gas prices in Minnesota recently climbed above $4 a gallon for the first time since 2013, according to GasBuddy, a fuel price tracker. And unlike 2013's brief spike, this spell of $4-plus prices started a week ago and could last.
"Gas prices are at record highs, and there is little to no relief in sight," Lynn Helms, North Dakota's state minerals director, told reporters in a web conference Friday. "The high crude oil prices are sustaining high gasoline prices."
West Texas Intermediate — the benchmark U.S. crude price — hovered around $110 a barrel Friday, up from about $77 at the beginning of 2022. Oil prices in March and now are nearly 110% higher than prices in North Dakota's tax revenue forecast.
High petroleum prices have not spurred a drilling frenzy, though. Burned before by such behavior, oil companies are being financially disciplined — and reaping big profits.
Still, oil and gas production is rising, primarily in Texas and New Mexico, and to a lesser extent in North Dakota. The state churned out 1.12 million barrels of oil a day in March, up 2.8 % from February, data released Friday shows. Natural gas production rose 4.6 % during the same time.
"March was a very good month," Helms said.
The number of drilling rigs — harbingers of future production — currently stands at 40, up from 34 and 38 in March and April respectively. The rig count last hit 40 in April 2020 before falling precipitously as COVID-19 upended the economy.
Helms said he expects continued production gains, but April's output data, due out next month, will be ugly. Two April blizzards within a week knocked out power to the oil fields.
At one point, daily oil output fell from around 1.1 million barrels to 300,000 barrels, and many producers took well over a week to return to full production, Helms said. Even now, about 10 % of producing wells remain offline because of residual storm issues.