Stock from drilled oil production wells in the U.S. rose for the first time in more than 2 years

The number of uncompleted oil and gas wells (DUC) increased by 8 to 4,408 in October this year compared with the previous month, the U.S. Energy Information Administration said Monday. The increase ended a 27-month streak of DUC declines that is the longest since shale oil and gas production began more than 10 years ago.

Putting a new shale well into production consists of two major steps: the drilling itself, as well as hydraulic fracturing, which requires special crews that sometimes work months apart.

Data on the number of DUCs show whether the shale sector is building up the stock of wells prepared for hydraulic fracturing, or whether, on the contrary, it is running out of those reserves. The number of such wells began to decline during the height of the pandemic, during which, amid falling oil prices, producers put rigs into downtime and cut costs to a minimum.

The past week saw the first hints of a rebound in rig count after explorers expanded the number of rigs at a record high in nearly five months, signaling a possible return to restocking prepared wells.

Still, much of the shale industry is holding back production because of pressure from investors not wanting a repeat of previous up-and-down cycles, shortages of critical equipment such as fracking pumps, and record costs.

In addition, the industry is not making the kind of profits seen in the past as oil rig productivity continues to decline. According to the EIA, oil production per rig from new wells has fallen to its lowest level since July 2020.