As we move past the dog days of summer and into the four remaining months of 2024, the many down arrows that appeared on the cover of our August OCTG Situation Report might have led readers to believe that summer has given way to ‘fall.’
But things aren’t always as they appear on the surface. So, we start by asking, is it all downhill from here? Spoiler alert: it’s not.
While fishing for ideas for our editorial this month we were lured in by the number of positive reports about the record levels of domestic oil production reached in 2023 into 2024. In March the EIA officially confirmed that, “the US produced more crude oil than any country—ever.” That’s a significant statement and one that was originally declared by S&P Global in late December 2023, when they also concluded that the amount of oil that the US had exported was near the total production of Saudi Arabia or Russia. Pretty remarkable when you consider that exports of crude oil, refined products, and Nat Gas liquids were zero in 2008.
Perhaps we could be accused of living under a (shale) rock having noted this achievement eight months into the year, but that just confirms how busy this year has been in the OCTG business. And for the record, we can still recall the excitement in relaying this type of news back in 2009 when our industry rose to the occasion and helped to pull America out of the financial crisis by adding meaningful growth to our nation’s GDP through the adoption of hydraulic fracking and horizontal drilling.
The two charts featured on the second page of our August Report provided a snapshot of the ups and downs of the OCTG supply market over the past 12 years. The optimists among us hope to report on more ups than downs as we close out this year and move into the next. And yes, the OCTG market took an unplanned ‘time out’ for a large portion of this year as a high level of M&A activity took a bite out of demand, but with a few less headwinds (and a couple ‘trade wins’) in the offing perhaps this time will be viewed as one that prepared us for the next upcycle. Informal conversations with domestic mills over the past month suggest this hopeful outlook is more than just a pipe dream—at least for now.
As of August 2024, OCTG spot pricing has been on the decline for 22 consecutive months, we analyzed what’s transpired in OCTG pricing over those months in our August intel. We also clarified our pricing projection for both Q3 and Q4 therein.
Next month we’ll revisit our consumption forecast for 2024, and we’ll tackle another exclusive OCTG quarterly yard inventory survey in October. ’Til then we’ll be casting lines and keeping it ‘reel.’ See you in September!
NOTE: Our monthly blog posts offer a slice of the content we publish in The OCTG Situation Report® every month. To subscribe and/or request a complimentary copy of our Report for review please visit: https://www.octgsituationreport.com/subscribe.
Photo Chevron Corp. Courtesy ©Jim Blecha Photography
Kommentarer