US OCTG market: COVID-19 and crashing oil prices dampen activity

Tuesday, 07 April 2020 19:40:03 (GMT+3)   |   San Diego
       

Oil prices have continued to soften in the past week, as global stay-at-home orders are taking a toll on demand. That, coupled with the ongoing oil production war between Saudi Arabia and Russia, has led to near-quiet activity within the US J55 ERW OCRG casing market.

One source, when asked about current spot market pricing, said it’s hard to peg. Mill pricing is extremely flexible, he said, and service center pricing is “all based on how desperate the service center is for cash flow.”

“Our phones just haven’t been ringing, and I can’t give quotes when I don’t have inquiries,” he said, noting that some experts have predicted that oil prices are expected to fall below $20 per barrel in the upcoming weeks.

Last Friday, Baker Hughes reported that the number of rigs drilling was down by 62, to a total of 562, week-over-week. Year-over-year oil exploration is down by 32.4%.

In terms of ex-mill OCTG spot market pricing, the “average” quoted price is now hovering at approximately $47.50 cwt. ($1,047/mt or $950/nt), down from $49-$54 cwt. ($1,080-$1,191/mt or $980-$1,080/nt), ex-mill, last week, although that price point is flexible. Imported material, sources note, is “slightly cheaper, although the price doesn’t matter when no one is buying anything.”

 


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