US OCTG market trends optimistic due to higher global oil prices

The most recent data from Baker Hughes indicates that for the week ending Sept. 15, the number of US rotary rigs drilling for oil was down by seven, which brings the current oil rig count to 749.  There are, however, still 333 more rigs targeting oil than there were during the same reporting period in 2016; year-over-year oil exploration in the US is up by 80 percent.

Earlier today, news outlets reported that oil prices traded close to a five-month high after newly released data showed that key oil producers in the Middle East continued to cut supply. The cut is in line with a deal that producers in this region cut with OPEC as a means of reducing the global crude oil glut.

Iraq, OPEC’s second-biggest producer, confirmed it had cut its output by 260,000 barrels per day.

Current oil prices, which are trading at $50.35 for US West Texas Intermediate and at $55.99 for global benchmark Brent Crude, however, have helped to encourage drilling within the US. A report by the US government yesterday stated that it expects US shale output will rise for the 10th straight month in a row in October.

In terms of pricing, offshore offers remain stable. As with last week, prices for imported J55 ERW OCTG casing from Taiwan in the US domestic market have remained neutral and continue to be heard at $41.00-$42.50 cwt. ($904-$937/mt or $820-$850/nt), DDP loaded truck in US Gulf coast ports.