Spoiler Alert! The incessant barrage of news touting the imminent U.S. oil independence – a product of the shale revolution – has resulted in nothing short of an independence ‘daze.’ The IEA claims, “the U.S. will overtake Saudi Arabia as the world’s largest oil producer by 2020.” The ‘frack’ checkers caution against followingthe pied piper,especially as regulations and tax policies are still in question. No matter where you stand on the matter, sweet crude is certainly basking in the limelight and if the soothsayers’ predictions play out, OCTG could be in the sweet spot.
The big question right now is how are things expected to shape up in 2013? Many questions are still looming, which makes forecasting the future fraught with uncertainty. This same sentiment was expressed recently in a report released by Ernst & Young in early November where “caution and concern” were the watchwords going forward. Our general belief is that we’ll encounter “more of the same,” however sobering that may sound, in Q1 2013. This is to say more pressure on OCTG and commodity pricing, increasing capacity tonnages and further competition from imports unless the escalating analysis materializes into an actual trade petition. Our November Report fills in all the missing puzzle pieces and includes our predictions for the coming year.