According to Baker Hughes data from January 20, 2017, the U.S rig count for the week was 694 rigs exploring for or developing oil or natural gas. This is up 35 rigs compared to last week, with oil rigs up 29 to 551 rigs, gas rigs up 6 to 142 rigs, and miscellaneous rigs unchanged at 1 rig. Compared to this time last year, the 694 count is up 57 rigs, with oil rigs up 41, gas rigs up 15, and miscellaneous rigs up 1.
Vallourec, French-based global pipe manufacturer, is expecting challenging market conditions for the oil and gas industry for the remainder of 2016.
CEO Phillipe Crouzet said in the company’s second quarter earnings report that the oil and gas market will continue to be “significantly impacted by low demand and intense pricing.” He offered some optimism for the North American markets, however.
According to Baker Hughes data from September 11, 2015, the U.S rig count for the week was 848 rigs exploring for or developing oil or natural gas. This is a decrease of 16 rigs when compared to last week, with oil rigs down 10 to 652 rigs, gas rigs down 6 to 196 rigs, and miscellaneous rigs unchanged at 0 rigs. Compared to this time last year, the 848 count is down 1,083 rigs, with oil rigs down 940, gas rigs down 142 and miscellaneous rigs down 1.
The decline in the drilling of new gas and oil wells is having a direct impact on the amount of line pipe, storage tanks, and OCTG that is being used by the energy sector. A good portion of these products come from hot rolled coil or plate substrate, and are reasons for both the short lead times on hot rolled and plate at North American steel producers and the falling steel prices we have seen going back to mid-2014. Prices have since stabilized for hot rolled coil but the product is having a difficult time breaking out of a very narrow trading range partially due to the weakness in the energy sector.