US OCTG prices holding, but supply concerns linger

Oil country tubular goods (OCTG) tags should hold their ground going into the new year due to high oil prices and strong drilling activity on shale plays, market sources told AMM. Renewed demand for OCTG, however, may not be enough to curb a possible oversupply at domestic and foreign mills when buyers look to restock in 2012.

Some alloy grades, such as L and P, are in demand because they are better able to withstand higher temperatures and deeper wells with long laterals and multiples fracks in shale plays, one distributor source said. "Carbon grades, it’s a different situation. You see a lot more volatility on those items," he added.

Such comments largely echo the most recent data from Pipe Logix Inc., Tulsa, Okla., which put average OCTG prices at $1,859 per ton in December, up $1 from the previous month and 11.3 percent higher than $1,671 per ton in December 2010.

Seamless OCTG prices averaged $2,053 per ton in December, up 0.4 percent from $2,044 in November and 14 percent higher than $1,801 per ton a year earlier, Pipe Logix said, while welded OCTG prices averaged $1,665 per ton...


Michael Cowden

December 31, 2011

01:53 GMT