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OIL
US production has slowly increased with EIA weekly oil data last week showing oil production over 12mbbls for the first time since early 2020.
- Drillers are however potentially starting to run low on drilled but not completed wells (DUCs). DUCs have gradually been falling since mid-2020 and are at the lowest in recorded data back to 2013.
- With high market prices, drillers are completing wells to begin producing oil but with low levels of DUCs it may take longer and be more expensive to significantly increase production.
- Baker Hughes rig counts however continue to show an increase with oil rigs up 1 to 595 in data released last week. This has not yet translated into increase drilled wells or significantly increase completions.
- The graph below shows the low DUCs after peaking during 2020 due to low market prices reducing completions.
Source: Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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