According to the most recent data from Baker Hughes, the current number of US rigs drilling for oil has fallen by two rigs in the past week, bringing the current total to 316; this reflects a 330-rig decline from levels seen during the same reporting period last year.
Year-over-year oil exploration in the U.S. is down 51.1 percent; the weekly average of crude oil spot prices is 16.2 percent lower than it was this time last year.
And while some are predicting that oil prices could reach $60 during the summer months, based on seasonal upticks in demand, few, if any within the US domestic and import OCTG markets expect that higher prices will provide any immediate relief for the US energy pipe industry due to weak drilling activity.
In terms of futures pricing, offer price ranges from Korean and Taiwanese producers of unfinished J55 ERW OCTG casing continue to be 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, but numerous sources close to SteelOrbis say that few, if anyone is biting.
“The market is just so slow right now, and there’s so much stuff that’s on the ground that no one really wants to take any sort of gamble on futures,” one trader source said.
As with last week, domestic market prices for finished J55 ERW OCTG casing are still “all over the map,” depending on who you are, how much you want to buy and where you’re buying it from,” another source said. “We all know the domestics are wanting to push prices up but there just isn’t any need to place an order with the mills. If a service center needs something they’re far more likely to broker it than they are to book with a mill.”
Other sources agree. “I can’t even speculate what the ex-mill price could be because it’s been months since I’ve checked. There’s plenty of stuff that’s been on the ground and has been sitting in service centers’ yards for a couple years that can be had at a pretty big discount. Anyone who comes in with a reasonable offer can buy whatever they need at whatever price they’re pitching.”