(The Center Square) – The drop in crude oil production in the United States in May “is part of any normal economic cycle,” according to a New Mexico industry group.
U.S. crude oil production fell 0.5% in May, the lowest level since February, Reuters reported. Production in New Mexico saw an even bigger drop, down 0.7%.
“After incredible growth in the Permian Basin over the past several months, the small decline is tied to weaker domestic demand, rising inventories and lower demand for oil as Americans drive less. late summer, as well as growing fears of a recession,” New Mexico Oil and Gas Association spokesman Joe Vigil told The Center Square.
He pointed out that the state has recently seen large increases in oil production.
“The previous incredible growth more than offsets the slight decline,” Vigil said. “Growth and declines are part of any normal business cycle.”
The economic impact of the May drop will be minimal, however, according to Vigil.
“New Mexico’s oil and gas industry continues to support thousands of New Mexico jobs and generates millions of dollars in economic output that funds our schools, first responders and vital infrastructure,” he said. he declares. “New Mexico’s oil and gas workers continue to answer the call to meet energy demands and ensure energy security for New Mexico and America.”
However, in the longer term, excessive government regulations on the oil industry could reduce production, Vigil added.
“Excessive regulation reduces energy production,” he said. “While we are committed to sustainable energy policies, we recognize that additional government regulations will negatively impact the industry. Our industry’s efforts to reduce the environmental impact of our operations continue through new technologies, innovation and investment – not excessive government regulation.”
U.S. production fell in May even as demand for U.S. crude and petroleum products rose to its highest level since March, Reuters reported.
Crude oil production increased in some states in May, such as North Dakota, which saw a 17.1% increase. Meanwhile, production in Texas fell 1% to the lowest level since February, according to Reuters.