This month we conjured our inner entomologist to unearth what might be bugging the oil patch. What we found: ‘crickets’ have taken over and the silence is deafening!
And yet somehow all the hubbub is focused on the torrent of trillions of creepy cicadas with their trademark shrill mating calls descending on the Midwest and Southeast parts of the country through July. This mashup of crickets and cicadas makes for a seemingly apocalyptic backdrop for the summer. It also furthers the unease that many oil patch participants feel as they tread lightly waiting for this inert state of affairs to pass. It shouldn’t come as a surprise to anyone that silence is viewed as deadly to many in this business.
The good news is that May is almost over and, with the exception of Mother Nature messin’ with Texas and parts of the Gulf Coast, the Mayhem has been mostly manageable. While the fact is, things in the US tubulars world are slow-going, this isn’t to suggest that folks won’t have plenty to say about what might take place between now and the end of the year. We’ll break it all down in our June Report when we take the pulse of the market during our midyear market calls.
We viewed this month as a good interval to take stock of what has transpired so far this year starting with the rash of operator consolidation that’s been taking place in the oil patch, which we’ve addressed in prior Reports. These have certainly thrown a monkey wrench into the works as no segment of the oil patch has gone untouched. The upshot is fewer rigs, shorter lead times, and open capacity—not exactly what was originally forecast for 2024 back in 2023.
Looking at this month’s OCTG spot price index provides yet another example of how “slow” has seeped into every segment of the tubulars market. In the case of pricing, it’s not ’slow’ bad—at least not from a seller’s perspective. We offer a full examination of the month’s pricing and the outlook ahead in our May market intel. And speaking of slow; OCTG shipments are no different, either. We discuss what’s expected for the remainder of Q2 moving into Q3 for that segment of the industry, too.
The Greek philosopher Sextus Empiricus has been credited with saying that, “the mills of the gods grind slowly, but they grind small.” In other words, one's destiny is inevitable even if it takes considerable time to arrive, leaving us no choice but to enjoy (or endure—depending on your temperament) the ‘slow.’
NOTE: Our monthly blog posts offer a slice of the content we publish in The OCTG Situation Report® every month. To subscribe and/or request a complimentary copy of our Report for review please visit: https://www.octgsituationreport.com/subscribe.
Photo Courtesy Murphy Oil Corporation
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