The most recent data from Baker Hughes indicates that for the week of July 1, the number of rotary rigs drilling for oil increased by 11, bringing the current number rigs drilling for oil to 341. There are still, however, 299 fewer rigs targeting oil than this time last year. Year-over-year oil exploration in the US is down by 46.7 percent; the weekly average crude oil spot prices is 16.9 percent lower than it was during the same reporting period in 2015.
It should also be noted that declines in US oil production, combined with lessened imports, led to a 4.1-million-barrel decline in crude oil inventories. Although these factors, on the surface, seem to be positives for the US domestic and import energy pipe industry, overall order activity, inquiries and domestic energy pipe production continues to trend sluggish.
Numerous sources close to SteelOrbis continue to report there is “months upon months-worth of years-old inventory that’s still on the ground.”
In terms of pricing, futures offers for unfinished J55 ERW OCTG casing from Korean and Taiwanese OCTG producers are still trending at approximately $27.50-$29.50 cwt. ($606-$650/mt or $550-$590/nt), DDP loaded truck in US Gulf Coast ports, but pricing is flexible based on the originating mill.
As in previous weeks, ex-mill pricing in the US for finished J55 ERW OCTG casing is uncertain, as distribution center sources continue to broker pipe from one another as opposed to ordering from US domestic pipe mills.