Oil and gas companies expand shale “fracklog” in signal of slowing production growth

(Bloomberg) – Oil and gas companies added to the so-called fracklog for a second straight month in the latest signal of slowing growth in U.S. shale oil production.

Shale operators drilled more crude wells than they fracked in April, marking the first back-to-back increase in drilled-but-uncompleted projects since late 2022, according to a report from the U.S. Energy Information Administration on Monday. The tally is a key indicator of near-term crude flows from U.S. shale fields because fracking is one of the final steps in the process of bringing new wells online.

Total U.S. shale oil production is forecast to inch higher in June by just 0.2% on a sequential basis to 9.85 MMbpd, the government analysts wrote. That would still fall short of December’s record level of 9.98 MMbpd.

Production from shale fields is being closely watched by OPEC and its allies as they prepare to gather next month to evaluate supply flows. Brent crude, the international benchmark, has climbed roughly 8% this year, erasing most of 2023’s 10% slump.

Amassing portfolios of unfracked wells provides oil companies with the flexibility to ramp up output when prices advance. As of the end of April, the fracklog rose by six to 4,510, according to the government’s assessment of the seven most-important U.S. shale regions.