According to the most recent data from Baker Hughes, the number of
US rotary rigs drilling for oil fell by an additional five rigs last week, which brings the current number of
US rigs drilling for oil to 510. Rigs directed toward drilling for natural are also down an additional eight rigs since our last report a week ago. Current year-on-year oil exploration efforts continue to be down 61.3 percent; year-on-year gas exploration is down by 59.9 percent. The weekly average of crude oil spot prices is 32.8 percent lower than last year and natural gas spot prices are 25.6 percent lower than last year.
Layoffs at
US domestic
tubing companies have continued.
Early last week, SteelOrbis reported that Tenaris would be laying off 100 workers at its Blytheville, Arkansas welding pipe mill. By the end of the week,
US Steel announced that 677 workers could be laid off at its Lone Star
Tubular Operations in Texas due to “weak demand from the energy industry.” The plant was idled last year before returning to normal operating levels, but a spokesperson told local media that the long-term downtrend in oil prices and resulting drop in energy pipe demand has necessitated layoffs again. The company has not set a date for layoffs to begin, but they will reportedly be temporary.
Sources close to SteelOrbis say that all of this continues to have a negative impact on both
US domestic and futures pricing, noting that both domestic and offshore sellers are ready and willing to negotiate with buyers in hopes of booking orders.
In terms of prices, the average
US domestic spot market price range has held steady since our last report a week ago at approximately $42.50-$43.50 cwt. ($937-$959/mt or $850-$870/nt), ex-Midwest mill, while offshore futures prices from Korean and Taiwanese producers are also lateral week-on-week, at $27.50-$29.50 cwt. ($606-$650/mt or $550-$590/nt), DDP loaded truck in
US Gulf Coast ports. As in previous weeks, all pricing is negotiable.