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Despite OPEC’s Best Efforts Oil Inventories Have Grown

OPEC

Friday June 16, 2016

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. Permian production lower than you think

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- The EIA is out with a new Drilling Productivity Report, expecting shale production increases of about 127,000 barrels per day in July. The largest source of growth is predicted to come from the Permian Basin, with additions of 65,000 bpd. The Permian has become the hottest shale play in the country.
- But the EIA has had to continually revise its production estimates lower over time as actual production figures have disappointed.
- At the same time, the number of drilled but uncompleted wells in the Permian has ballooned, having climbed by more than 30 percent this year.
- As such, the Permian could have a lot more production sitting on the sidelines, not yet in production.

2. Permian sees productivity decline

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- The Permian Basin has also seen productivity run into a brick wall, with new-well production per rig having declined every month so far this year.
- The extraordinary productivity increases came to a halt in 2016.
- Back in August 2016, the average rig could produce just over 700 barrels of oil per day from…

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