Feb. 15, 2017
 
Oil’s Give and Take Keeps Market Guessing

Effective Jan. 1, OPEC and Russia began cutting energy production in a move meant to ease the world’s oil glut and boost oil prices. So far, producers in North America (and their OCTG suppliers) seem to be the primary beneficiaries.

Late last year, OPEC agreed to cut production by 1.2 million barrels per day, and Russia by an additional 558,000 barrels per day, for a six-month period, to try to bring supply and demand into better balance. In the first month, nearly 90 percent of OPEC members complied with the cutbacks, reducing output by about 900,000 barrels per day. At least partly in response, the oil price jumped by more than 70 cents in January to around $52.40 per barrel.

Prices in the $50s have been enough to significantly boost drilling activity in North America. Oilfield service company Baker Hughes reports there are nearly 1,100 active rigs in the U.S. and Canada now, up by 330 over this time last year. Oil producers in North America’s shale fields have gotten much more efficient. By some estimates, $50 per barrel is the new breakeven—and the point at which suppliers of steel pipe and tube begin to see new demand.

Oil prices, currently in the mid-$50s, are anything but assured this year. Domestic producers have gained an advantage from OPEC’s sacrifice, but it may be short-lived, say the experts. If the bump in U.S. production undermines OPEC’s efforts to ease the global glut, it may weaken further cooperation by cartel members. Their frustration at losing market share could translate into renewed exports onto the world market later this year.

September 2017: Numbers Don’t Add Up for Service Centers
More...
 
Pause
September 2017: Lichtenstein: Five Steel Truths that Demand Attention
More...
Fall 2016: Cutting & Sawing Equipment
More...
Summer 2017
More...
 
Pause
Advanced Controls on Braner Slitters
More...
AHVS Precision Leveler Features Flip-Top Design
More...
Formtek’s Tishken Slitter Increases Production Volume
More...
Red Bud System Handles High-Strength Steels
More...
Bradbury Launches Flat Trak CL Monitoring System
More...
Artus Knives Custom Designed
More...
 
Pause
Privacy Statement  |  Terms Of Use
Copyright by Metal Center News



Monday, October 23, 2017