This month our complete Report offers a mixed bag of musings from the oil patch. We dubbed our up-stream of consciousness commentary “Drill Bits & Pieces”: a review of all things OCTG.
We begin with the most pressing issue of the day: the preliminary ITC determinations that were announced Friday, August 16. Simply put, the material injury finding was unanimous, 6-0 in the affirmative, for all nine countries importing OCTG to the U.S. This is viewed as a good start but Yogi Berra would be the first to say, “it ain’t over ’til it’s over.” What is not yet known and remains in question is the duty margins, which will determine the ultimate impact of the trade case.
And now to Mexico for news on the ‘oil of olé!’ Our neighbors south of the border are working to overhaul their constitution; moving to end the country’s 75-year old monopoly on oil and gas production and create a robust energy sector for the country. Even with a yes vote, production is a ways off but this situation borders on the positive side for OCTG producers and sellers in the coming years.
In news that’s a ‘natural’ for those in the oil patch, Ford Motor Company is driving home the nat gas initiative with the announcement that their perennially popular F-150 pickup will offer a natural gas option in 2014. While creating a nat gas fueling network and popularizing nat gas powered vehicles for retail customers has yet to gain real traction, this is a start in the right direction and we applaud their innovation.
Looking over some of the key barometers of oil patch health eight months into the year we are mostly pleased. Yes, quarterly earnings of tubular companies could be improved and we expect they will soon if the trade case is successful. Other telltale indicators are discussed in our August market intelligence.
Is it safe to say we’ve reached an inflection point? Let’s just say as summer gives way to fall, win-ter is looking even more promising.