Market players within the US domestic and import API X-52 ERW line pipe markets say that despite the fact that US oil rig counts are trending strong, they question whether the line pipe market could soon run out of steam.
Oil prices surged above $47 per barrel yesterday after reports of a larger-than-anticipated dip in US oil stockpiles. However, some say that oil drillers who had planned to bring new rigs back online need oil prices to be above $50 per barrel in order for the projects to be financially viable.
“Activity has been fantastic but a lot of us are wondering if all of that is about to level off,” a source said. “We have one customer who had planned to bring more than a dozen rigs online this year. They’ve since revised that number to zero because the financials just don’t make sense with oil being where it is.”
In terms of current pricing, US domestic API X-52 continues to trend at $56-$58 cwt. ($1235-$1279/mt or $1120-$1160/nt), ex-mill, while prices for Mexican API X-52 line pipe in the US domestic market have softened by $2.00 cwt. ($44/mt or $40/nt), to $47.50-$49.50 cwt. ($1047-$1091/mt or $950-$990/nt), FOB Houston.
Current pricing for Korean API X-52 line pipe in the US domestic market has also remained lateral, at $42.50-$44.00 cwt. ($937-$970/mt or $850-$880/nt), DDP loaded truck in US Gulf coast ports.