After weeks of continued declines, Baker Hughes has reported that for the week ending June 3, the number of
US rigs drilling for oil unexpectedly increased by nine, to 325.
Also of interest is a recent rise in oil prices. On Tuesday, news outlets reported that Brent oil prices rose to $50.91 per barrel, which is a near eight-month high.
It’s further been reported that
US oil inventory stockpiles have fallen for the past three weeks in a row; last week, it’s estimated that
US oil stockpiles fell by approximately 3.5 million barrels.
Although some see these as positive signs for the domestic J55 ERW OCTG casing market, others say it’s still too soon to bet on any market improvements. “The wildfires in Canada, which have had an impact on their oil production, will eventually subside and that production will come back. The disruptions out of Nigeria are also temporary and I have a hard time thinking that $50+ per barrel oil is here to say. I’ll be surprised if it doesn’t fall back,” one energy pipe service center source said.
“If prices do stay up for a few weeks we may see the rig count bump up again, but there’s still so much pipe that’s been on the ground for the past two years that no one is going to rush to the mills to buy anything.”
Current futures pricing from Korean and Taiwanese producers of unfinished J55 ERW OCTG casing is 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, but few, if anyone has expressed interest in booking futures.
As with last week, domestic market prices for finished J55 ERW OCTG casing are “still too hard to pinpoint,” as buyers continue to report that if they need energy pipe they are brokering it from each other, as opposed to placing orders at the mills, because “there is still plenty of stock that’s available on the ground.”