Earlier today, SteelOrbis reported that the US rotary rig count decreased by an additional 35 rigs in the past week, bringing the current total rig count to a mere 339 rigs. Seventy-nine rigs are drilling for gas, whereas a scant 258 rigs are drilling for oil.
And while oil prices have rebounded from their unprecedented low, current pricing is still “nothing to write home about.”
For example, as of mid-day on Friday, WTI and Brent Crude futures were trading at $29.67 and $32.77, respectively. However, Goldman Sachs is projecting that those price points are likely to remain stable through the summer, due to the uncertain pace of global demand amidst the coronavirus pandemic.
On one hand, states and local municipalities have begun to ease shelter-in-place restrictions, which many believe will lead to some much-needed demand and, in turn, will help reduce the global oil glut. On the other hand, in the absence of an effective coronavirus treatment and/or vaccine, some believe that a premature reduction in social distancing efforts could lead to a second resurgence. “If that happens, we may fall back to square one,” a source said.
Yesterday, the International Energy Agency (IEA) said that a resurgence of the virus would be a major risk factor to global oil demand.
For now, however, those working within the domestic and import energy pipe markets say that business is as slow as ever, and many have said that quotes, which are few and far between, “feel a lot more like tire-kicking than serious inquiries.”
In terms of price, market players agree it’s a buyer’s market, because “prices are all over the map and nearly impossible to pinpoint.”
Looking to averages, the most “common” spot market price for domestic J55 ERW OCTG casing is hovering at $47.50 cwt. ($1,047/mt or $950/nt) ex-mill, although offers up to $2.50 cwt. ($55/mt or $50/nt) below that price point are available. As for line pipe, the average spot market price range for domestic API X-52 line pipe remains in an “official” range of $46.50-$48.00 cwt. ($1,025-$1,058/mt) or $930-$960/nt), ex-mill, although deals below that range have been reported.