The oil patch was bubbling over this May when attendees of the world’s largest offshore technology event, the Offshore Technology Conference, gathered in Houston. With the highest recorded attendance in its 45-year history, the OTC proved, once again, to be a shore thing. Despite the OTC’s offshore focus, surging onshore shale production was the talk of the town.
Meanwhile in the nations capitol, talk of U.S. crude oil exports surfaced after being all but buried since 1975. As would be expected oil companies are all in favor of priming the pump, but being that it’s an election year one wonders if this is little more than a ’shale’ game. Miles from Washington, the May-hem reached all the way down to Texas earlier this month where a frac-lash is playing out in the city of Denton. In a move that “Ripley’s” would find hard to believe, this North Texas town could become the first area in the state to permanently ban hydraulic fracturing.
Turning to the OCTG trade case, as South Korean imports continue their upward trajectory, anti-Korean sentiment is intensifying suggesting the likelihood that the original 0% margins imposed won’t hold when the final determinations are announced in early July. Canada recently filed an OCTG trade case, similar to that of the U.S., targeting imports against nine countries. Their petition included Indonesia but excluded Saudi Arabia. Amidst much buzz about imports and flatlining OCTG prices by CEOs during Q1 earnings calls, this month also saw 57 senators sign a letter urging the U.S. Commerce Department to take a firmer stance on enforcement of U.S. trade laws against unfair trade practices.
Surveying the OCTG landscape as we zoom into June, most of our other major market indicators remain encouraging. All of the details along with our OCTG consumption forecast for 2014 can be found in the May Report. Next month we’ll be able to confirm the speculation that upstream spending is on the upswing for 2H14 when the updated E&P spending surveys are published. For the moment it’s safe to say, all’s well that ends well come what May.