On Friday of last week, Baker Hughes reported the US rotary rig count fell by 11, to 805 for the week of Nov. 15. The current rig count is down by more than 25%, year-over-year.
As of Nov. 15, the oil rig count fell by 10, to 674, week-over-week, and the number of rigs targeting natural gas fell by 1, to 129. Year-over-year oil exploration in the US is down 24.1 percent; gas exploration is down 33.5 percent.
Oil prices also fell by more than 1% yesterday, which erased last week’s gains. Market sources note that oil prices continue to be highly reactive to any and all news linked to the US-China trade talks. The trade war, now in its 16th month, has slowed global growth. This, in turn, has reduced demand for oil and has led some analysts to question whether a supply glut will emerge in 2020, which will further exasperate problems within the US domestic and import energy pipe markets.
In terms of OCTG pricing, as in previous weeks, the “official” pricing continues to be heard in the range of $50-$55 cwt. ($1,102-$1,213/mt or $1,000-$1,100/nt) ex-mill, although spot market deals are readily available based on two factors: how many tons a buyer wants to purchase and how desperate sellers are for cash flow.