That "Error" On Yesterday's Director's Cut -- December 10, 2015; Back In April, 300,000 BOPD Being Stored Underground Across The US Due To Fracklog

Earlier I had mentioned an error in the Director's Cut posted yesterday. It is definitely quibbling on my part, and may or may not be considered an error by others. Here's the story:

From the Director's Cut one month ago, September, 2015, data:

"At the end of September, there were an estimated 1,091 wells awaiting on completion services, 98 more than the end of August." [In the August, 2015, one month earlier: "...there were an estimated 993 wells waiting on completion services, 79 more than at the end of July."] 

Note the "accuracy of the delta between the estimated numbers.

Now, to the October, 2015, data, posted yesterday: "At the end of October there was an estimated 975 wells waiting on completion services, 105 less than at the end of September." In this case, the delta between the estimated 1,091 and the estimated 975 is 116, significantly different than 105.

Again, the number of wells waiting to be completed is an estimate but it's been my impression that the delta has been the exact difference between the estimates posted. For some reason, this month (yesterday), the Director's Cut did not do that.

It's an extremely minor point and probably does not mean anything. However, the fracklog is being watched very closely and when I saw the 116 vs 105 it caught my attention.

It's possible I made an arithmetic error; or that last month's fracklog was revised; or I misread something. 

But if accurate, there is another story here. I don't keep track -- it might be impossible -- of the number of wells waiting to be completed (except when the monthly report comes out) but I do watch the daily report very closely. It's been my impression a lot more wells were permitted and/or drilled than were completed this month. I had expected the fracklog -- the number of wells waiting to be fracked -- to increase. So, the decrease caught me by surprise.

It is what it is. The Bakken continues to surprise.

I hope no one takes this too seriously. I remain completely in awe how absolutely excellent the NDIC is; I am their original fanboy.

****************************

Flashback

For the archives. Don sent me this article a long time ago when I was traveling, and now just got back to it. From 24/7 Wall Street back in April, 2015:

Crude oil prices rose nearly 3% on Thursday as traders bid barrels higher following more reports of lower U.S. rig counts and more airstrikes against Yemeni rebels. West Texas Intermediate (WTI) crude for June delivery closed at $57.75 on the NYMEX after topping $58 briefly. Prices have pulled back to around $57.50 early Friday morning.

The pullback is likely due to a report from Bloomberg Thursday that claimed more than 4,700 drilled wells in the United States have not been completed while oil producers wait for prices to rise again. More than 1,500 wells in the Permian Basin, 1,250 wells in the Eagle Ford and 632 wells in the Bakken have been drilled but not completed.

The backlog in completions, which producers call the fracklog, is keeping 322,000 barrels a day stored underground, according to Bloomberg. That equals about the amount of oil currently being produced by Libya.

We noted earlier this month that producers are holding back production on the expectation that cuts in drilling and completions now being implemented will result in prices rising to levels that will once again produce profits. That level is around $60 to $65 a barrel.

Futures traders have been increasing their long positions for several weeks now, anticipating price increases. What is unknown is how quickly producers can turn idle wells into flowing moneymakers.