Add another concern to a growing list of reasons behind declining crude prices: A record U.S. fracklog.
U.S. Energy Information Administration data shows that there were 5,946 drilled-but-uncompleted wells in the nation’s oilfields at the end of May, the most in at least three years, Bloomberg reports.
In the past month alone, explorers drilled 125 more wells in the Texas Permian Basin than they would open, representing about 96,000 barrels a day of output hovering over the market.
If OPEC thought shale was a thorn in its side before, just wait until U.S. explorers turn their spigots on full blast. Wells waiting to be fracked and flowing are an overhang that could mean a burst of new supply in the second half of the year and into 2018, says Luke Lemoine an analyst at Capital One Securities in New Orleans.
“Even though rig counts have gone through the roof in the Permian, we really haven’t even felt the full production implications,” adds William Foiles, an analyst at Bloomberg Intelligence in New York. “We’ve only felt 70 percent of the rise in drilling.”
