Despite the recently reported decline in revenue from South America, the French-based tube and pipe producer Vallourec has stated that it will likely increase prices on OCTG in H2 2018.
The proposed increase is attributed to improved market conditions in Brazil and the United States. The US rig count is expected to remain firm over the course of the second half of the year due to exploration commitments and the easing of relevant licensing and regulations. With higher oil prices, especially given the effect from US sanctions on Iran and Venezuela’s economic challenges, Vallourec’s management expects higher activity for oil and gas projects in South America and North America.
Oil prices this week surpassed $80/barrel and French Total’s CEO Patrick Pouyanne has forecast that the potential loss of barrels of Iranian crude from the market along with Venezuela’s output decline could “push prices beyond $100/barrel in 2018.”