Oversupply of oil and falling oil demand continue to hinder the US domestic energy pipe markets. For example, earlier today, it was reported that US West Texas Intermediate crude futures prices fell below $21 per barrel, with Brent crude diving below $30 per barrel.
“With everything that’s been going on with the coronavirus, there’s been a massive drop in demand,” a source said. “It’s hammering the pipe industry.”
Pipe sellers’ pain is evidenced by the recent rig count numbers. On Friday, Baker Hughes reported the domestic oil rig count fell by 58 rigs, to 502. Year-over-year oil exploration is down by 39.5%.
In terms of ex-mill OCTG spot market pricing, as with last week, the “average” quoted price continues to trend at approximately $47.50 cwt. ($1,047/mt or $950/nt) ex-mill, although that price point is flexible. Imported material is still being heard at price points that are slightly cheaper than domestic offerings, although “no one is rushing out to buy steel right now.”