This month in the oil patch we took an informal poll across the supply chain to examine the OCTG outlook for the balance of the year. The consensus: we’re entering a period that has all the hallmarks of a lull. Whereas the rig count has remained relatively resilient this year, the record declines in nat gas prices combined with the recent drop in oil prices and oil-directed rigs denote drilling may have plateaued. Although no one is implying the sky is falling, we can see that one by one the principal drivers of growth are tapering, which suggests a slowdown in upstream activity.
The Gulf may spell some relief in all this but ultimately it comes down to economics. As national economies are the final customer for hydrocarbons and much of the outcome is tied to events overseas, we can’t help but wonder will the fate of OCTG for the remainder of the year be downhole or downhill?