What a ride the demand side of the OCTG sector has had over the last year or so! 2020 started out with the shadow of the virus hanging over the industry’s head. The rig count spent the first 8 weeks at around 790 after falling all through 2019 from 1075 at the beginning of the year. In early March, with a spreading pandemic, Saudi Arabia started a month-long oil price war when it was unable to convince Russia that production cuts were necessary in light of the expected effects of Covid-19. News of demand destruction and oversupply – and the first ever negative WTI price – pushed the rig count from 792 to 339 in just 2 months. 3 months later, it would hit the low point of 244. By year end, after another four and a half months, the rig count had recovered to 351. In the 7 weeks since, another 46 rigs have come online and oil prices have recovered to around $60/bbl courtesy of a steep decline in US production, careful market management by OPEC, and a healthy dose of economic optimism.
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