Uncompleted Wells

In May and June there was a lot of talk about uncompleted wells. This mythical amount of pre drilled wells that were only waiting for the prices to hit a certain dollar amount before they would all come online and flood the world anew with oil. Its pretty safe to say now that this was another industry boogey man. At the end of May, the price of WTI had risen to $50 per barrel. The invisible barrier that speculators pegged as the price required to complete all of those wells. We are now two and a half months past that point, we should be seeing all of that production coming online. Here is the weekly EIA US production numbers.

May 06                  8.80 mbd
May 13                  8.79 mbd
May 20                  8.77 mbd
May 27                  8.74 mbd
June 03                 8.74 mbd
June 10                 8.72 mbd
June 17                 8.68 mbd
June 24                 8.62 mbd
July 1                     8.43 mbd
July 8                     8.49 mbd
July 15                   8.49 mbd
July 22                   8.52 mbd
Aug 5                      8.45 mbd

There is no rise in production. Aside from a few weekly blips in July, US production is still trending downhill. But it may not be that simple. Maybe the flood of oil from completed wells has come online and is just hidden by the data. It takes about a month to complete a well after drilling. Assuming a lot of wells were being brought online near the beginning of June, we should have started to see production hitting the market in the past few weeks. And maybe we are. From May to June there was a 100,000 barrel per day drop, and from June to July There was a 300,000bpd drop. Yet July to August remained flat. There could have been a surge in shale production, but it was only enough to offset the current decline. Time will tell if that is the case. The US is still barely drilling, and if the backlog of uncompleted wells has been used up, then production in the months ahead will steeply drop.