Despite the biggest drop in active rig count since Q2, there is some positive news in mid-September on the oil supply/demand front, according to the RigData News & Analysis team., writing in the RADAR Report.
North Dakota’s oil regulators may permit more wells to be temporarily abandoned. This would allow operators to postpone completions past the 1-year window, delaying more Bakken crude from further flooding the market. North Dakota’s Bakken Shale has gained almost 1,000 wells that have been drilled but uncompleted since January.
Currently, North Dakota producers have 1 year to begin producing from a well. Therafter, the state’s Department of Mineral Resources allows another 6 months for the well to be completed or plugged.
Meanwhile, the IEA predicts that non-OPEC supply will fall by almost 500,000 b/d in 2016—the biggest decline in more than 20 years—with the US light tight oil accounting for 400,000 b/d of that total. Global oil demand will climb by 1.7 million b/d this year—a 5-year high—before moderating to growth of 1.4 million b/d in 2016, says IEA.