Oil prices, which hit a four-year high earlier this week, have remained strong now that the global oil supply glut has been drawn down. News reports indicated that US oil inventory levels fell by 1 million barrels last week, and it’s largely speculated that OPEC may be looking into extending current production cuts.
Reuters has reported that officials in Saudi Arabia want to maintain the cuts as a means of pushing oil prices to $80 per barrel. But while the uptrend in US rig counts and higher oil prices are beneficial to the US domestic drilling industry, steel industry sources say that customers are still unhappy with current energy pipe prices.
“Activity is good, but our customers aren’t exactly doing high-fives down the hallway over pipe prices,” a Texas-based source said.
Current pricing for US domestic API-X52 line pipe continues to trend at $70.00-$72.50 cwt. ($1543-$1598/mt or $1400-$1450/nt), ex-mill. The fate of the import market, sources say, will be clearer after the Trump administration makes a final decision on Section 232 exemptions on May 1.