OREANDA-NEWS. North Dakota's crude output fell by about 2pc in June and could drop below 1mn b/d as soon as this month, state officials said.

June crude output averaged 1.03mn b/d, down by 20,400 b/d from May, according to data released today. Natural gas output moved in the other direction rising by 1.1pc to 1.66 Bcf/d (47mn m?/d).

The June crude decline is part of a downward trend caused by low oil prices.

"We really think we will drop below 1mn b/d soon," said Department of Mineral Resources director Lynn Helms. That could happen this month, as some producers have been shutting in or restricting output.

North Dakota production should eventually stabilize at around 900,000 b/d or slightly higher and it could take as long as a year "before things turn around and build momentum" to move higher again, he said.

North Dakota today has 34 active drilling rigs, which is up by three from the end of July. The all-time high was 218 rigs in May 2012.

Drilling permits in North Dakota increased to 86 in July, up by 21 from the previous month. The all-time high was 370 in October 2012.

The sharp increase in permits in July comes as operators begin to position themselves for higher oil prices in 2017, state officials said.

North Dakota is home to the Bakken formation, the third most productive US oil shale field. Crude production has grown sharply there from about 150,000 b/d in 2008 to more than 1mn b/d, creating a major supply basin which has changed US market dynamics.