Continental Resources Inc. (NYSE:CLR), the largest oil producer in North Dakota, has suspended drilling in its Bakken shale field and shut most wells, CNBC reports. Because of the recent rout in the oil market, the company has also notified some customers that it would not continue to supply the commodity at current prices.
The company declared force majeure on at least one customer contract to avoid delivery after the plunge in oil prices, according to a Bloomberg report. Ron Ness, president of the North Dakota Petroleum Council, reportedly said that Bakken crude regional prices were $14 to $15 per barrel below the U.S. benchmark. The benchmark settled at $16.50 per barrel yesterday.
Harold Hamm, Continental's billionaire founder and chairman, spoke out after May oil contracts plunged into negative territory, asking the U.S. commodity markets regulator and the trading exchange to launch an investigation into whether "potential market manipulation, failed systems or computer programming failures" were the cause of the unprecedented price drop.
Oil prices have been affected by the ongoing COVID-19 pandemic as demand has cratered with lockdowns in affect around the world. Producers have been struggling with excess supply, as storage availability dwindles.
Prior to the price crash into negative territory, Continental had already cut its production by 30% through May. The report also said Hamm has asked Texas regulators to explore mandatory production cuts to help bolster prices. Texas is the largest oil producer in the U.S., while North Dakota is second largest.