There's yet another concern growing as oil prices erode: A record U.S. fracklog.
There were 5,946 drilled-but-uncompleted wells in the nation's oil fields at the end of May, the most in at least three years, according to estimates by the U.S. Energy Information Administration. In the last month alone, explorers drilled 125 more wells in the Permian Basin in Texas and New Mexico than they would open. That represents about 96,000 barrels a day.
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, according to analyst Luke Lemoine at Capital One Securities Inc.
"Even though rig counts have gone through the roof in the Permian, we really haven't even felt the full production implications," said analyst William Foiles at Bloomberg Intelligence. "We've only felt 70 percent of the rise in drilling."
Explorers generally start the drilling process with contractors using rigs to dig a vertical shaft that can drop 5,000 feet or more. They then build in a bend to extend the shaft sideways into a promising shale layer, a process that overall can take weeks.
Other service companies complete the process, using high-pressure machines that push in sand, water and chemicals to free up oil and natural gas that's pumped to the surface. Until that final step occurs, the well is known as a DUC, a drilled-but-uncompleted asset, part of the so-called fracklog.