Yesterday, Goldman Sachs revised its 2019 global oil price forecast from $70 to $62.50 per barrel. Their price forecast for US West Texas Intermediate was also revised downward from $64.50 to $55.50 per barrel.
The reason for the downgrade relates to surging global production. Today however, news outlets are reporting that Saudi Arabian officials have their eyes on $80 per barrel pricing; as such, the nation has announced plans to reduce their oil exports to 7.1 million barrels per day before the close of January.
“Fot the time being, market conditions seem to be slowing down,” said a source familiar with domestic energy pipe markets. “Oil prices have gone down, and the rig count is on the soft side. New material costs less than what we have in stock, which is also a position that no one wants to be in.”
Prices for US domestic OCTG coil have been declining in recent months; in August 2018, prices for J55 OCTG casing were trending at $64-$69 cwt. ($1,411-$1,521/mt or $1,280-$1,380/nt), today, offers are being seen in the range of $60.00-$62.50 cwt. ($1,322-$1,378/mt or $1,200-$1,250/nt), ex-mill.
Market sources say they’re continuing to make decisions cautiously, while keeping close tabs on the oil market.