What's Hot
Tom Stundza, Executive Editor -- Purchasing, 3/4/2004 2:00:00 AM
Future market conditions for pipe and tube products bought by the oil and gas sector "look very positive right now," according to Pamela Boone, vice president of finance and administration at Maverick Tube Corp. in Dallas. Crude oil has been selling above $30 per barrel and gas has been selling above $5 per thousand cubic feet. "At these prices, drilling activity in both the U.S. and Canada becomes very strong," she says. And that's why leadtimes become extended.
The key to the oil country tubular goods (OCTG) market still is the use of rotary drill rigs for energy exploration. Maverick and other pipe mills measure OCTG demand by tracking monthly consumption at the rigs, which have gotten more efficient at finding oil and natural gas. "When they punch a hole and don't hit oil or gas, they don't use any of our products," she says. "When they hit oil or gas, they use a lot of our products."
However, she cautions there are other risks in gauging the health of the volatile energy tubulars marketplace. These range from the level of oil and natural gas drilling activities in North America to fluctuations in industry-wide inventory levels, from steel sheet supply to steel price volatility, and from domestic and foreign competitive pressures to the presence or absence of government trade restrictions.
Now Playing: 