According to the most recent data from Baker Hughes, the number of US rigs drilling for oil fell by an additional eleven rigs last week; this comes on the heels of an eight-rig decline seen one week prior. The current number of US rigs drilling for oil now sits at 332.
Rigs directed toward drilling for natural gas fell by an additional rig since our last report a week ago, the natural gas rig count now sits at 87.
Rig count is again at the lowest level since Baker Hughes started counting rigs in 1949. It is likely the lowest back to around 1860 or 1900 if only rotary drilling rigs are counted.
And while some recent news reports have highlighted the possibility of falling US crude inventory levels, others point out that the global supply glut will continue to be a long-term problem. Any falls in US production are being more than offset by ramp-ups in production by Iran and other oil producing nations, sources note.
All of this continues to hinder buying activity within both the US domestic and import J55 ERW OCTG casing markets.
In terms of pricing, offers from both Korean and Taiwanese producers of unfinished J55 ERW OCTG casing are once again unchanged week-on-week and are still being heard in the approximate range of $27.50-$29.50 cwt. ($606-$650/mt or $550-$590/nt), DDP loaded truck in US Gulf Coast ports. Trader sources, however, have been quick to point out that offshore mills are amply willing to sell tons toward the lower end of that range if it means gaining interest from US buyers.
In terms of domestic market prices, other source have said that while US domestic mills are entertaiing offers for finished J55 ERW OCTG in the approximate range of $42.50-$43.50 cwt. ($937-$959/mt or $850-$870/nt), ex-Midwest mill, they are still hoping to get buyers to pay higher prices due to recent upticks in US HRC and scrap pricing.
On the ground inventory continues to be plentiful, sources note, adding that those who have it in stock are willing to sell it at “quite a discount just so they can finally move it.”