OREANDA-NEWS. March 23, 2015. As oil prices continue to fall amid flat demand and near-record supply, a dramatic production slowdown is expected to hit the US sometime this summer, if not earlier.

But no matter how unfavorable market fundamentals may be to Bakken operators, North Dakota is likely to see a “big surge” in production this June, potentially besting another supply record even if prices continue to crater, according to Lynn Helms, director of the state’s Department of Mineral Resources.

This surge will be largely propelled by two factors: a state-mandated time limit on drilling and the expected trigger of a major oil tax incentive, Helms said.

Helms, the state’s top oil and gas official, reported last week that North Dakota oil production fell about 3%, or about 37,000 b/d, to 1.190 million b/d from December’s all-time high of 1.227 million b/d. The reduction was expected as sweet crude prices averaged \\$31.41/barrel in January, down from \\$40.74/b a month earlier and the statewide rig count fell by 21 to 161.

But Helms said he doesn’t expect production to tumble dramatically, even as prices continue to fall, and even though he expects the statewide rig count to “bottom out” at about 100 rigs. Production, he said, will likely remain between 1.1 million b/d to 1.2 million b/d over the next few months.

But Bakken production could suddenly skyrocket, by nearly 10%, or an additional 75,000 b/d, to 100,000 b/d in June, Helms said. This means that despite low prices and production curtailments throughout much of North America, oil production in North Dakota could actually shatter a new record this summer.