As Price Pressures Recede, Oil Producers Find They Excess Capacity Near All Time Low

As recession fears stoked by 42 year highs in consumer and wholesale inflation figures and related economic challenges have driven oil prices on global spot markets to below the point it was at the start of the Ukrainian invasion, the Energy Information Administration in its Drilling Productivity Report finds that key drilled but uncompleted (DUC) wells are being tapped at a record rate.

While the drop in unrefined oil prices driven by lower demand holds the promise for dampened inflation, the near historic low of DUC wells shows that going forward, the ability of America to meet its energy needs is going to be even more challenged.

DUC’s generally are used by the industry to ramp up production quickly and have been tapped extensively since the 2021 shift in national policy on discouraging or preventing new exploration and production.

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