OCTG: “The Good, the Bad and the Ugly”

TMK IPSCO

Photo Courtesy TMK IPSCO

Susan Murphy | Publisher

Susan Murphy | Publisher

We took an informal poll across the supply chain this month to examine the OCTG outlook for the balance of the year: “the good, the bad and the ugly.” The objective was to determine if the deck is stacked in favor of or against OCTG. Our read: the odds are that the remaining six months of this high-stakes “game” of OCTG will pretty much break even with last year. That’s not to say we’re calling the rest of the year a bust by any stretch. Remember, last year in the oil patch was pretty good.

For openers: Barclays 2013 Spending Update forecasts that E&Ps will raise CAPEX 3.4% YoY in the U.S. (-2.4% in Canada) after estimating flat spending for the region earlier this year. Commodity price assumptions are slightly higher than reported in December at $86.50/bbl for WTI oil and $3.62/MMBtu (HH) for nat gas, but still well below current prices and averages for the year. And while it may not be an “ace in the hole,” it’s worth noting that only 6% of E&Ps expect their CAPEX to decline next year. Bottom line: the capital is in place – the incentive to put it downhole may come with some strings attached.

We evaluate potential “wild cards” and show our hand revealing our best prognosis for 2013 consumption and rig counts in our June Report. Game on!

About The OCTG Situation Report

Susan Murphy is the Publisher + Editor in Chief of The OCTG Situation Report, a leading authority focused on the North American Oil Country Tubular Goods market. Susan has worked alongside the founder of The OCTG Situation Report, Duane Murphy (and yes, there is a family connection!) for the past decade assisting in various aspects of producing the monthly publication and special projects including market research and development. It had long been suspected that Susan carried the 'OCTGene,' a fact that was confirmed when she took the reins in 2012. A native of Michigan and now practicing cowgirl, Susan employs her education from both the University of Michigan and Michigan State University bringing her expertise in the areas of research, marketing, branding and creative and technical writing to The Report. She has also enjoyed a successful business career as a lauded entrepreneur, running her own brand/marketing and advertising/design firms.
This entry was posted in CAPEX, E&P, E&P spending, Energy, OCTG, Oil & Gas Industry, Oil & Gas Pricing, Oil Country Tublular Goods, Oil Patch, Pipe, Prime Pipe and tagged , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s