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Some issues about OCTG market and price

The analysis shows that the key factors affecting the oil pipe market include the global oil distribution, the global demand for oil pipe, and the growth trend of crude oil prices. High volatility is not only a recent feature of the global stock market, but also the best term for the international oil price. The fluctuation of oil price has a significant impact on the oil pipe market. So analysis of the oil pipeline market is very important to the rational allocation of resources and adjust the sales strategy.

Current situation analysis about oil distribution

world oil reserves map

Oil is not evenly distributed around the world. More than half of the world's proven oil reserves are located in the Middle East, that is, the Middle East contains more oil than the rest of the world combined. Followed by Canada, Russia, the United States, these regions contain less than 15% of the world's proven reserves of oil. But the production of oil is not proportional to the reserves. For example, the Middle East contains more than 50% of the world's proven oil reserves, but only 30% of the world's oil production (although the figure is still higher than elsewhere). In contrast, the United States, which claims less than 2% of the world's oil reserves, produced 10% of the world's oil.

Clearly the Middle East has the most urgent desire in the oil drilling industry. Oil casing is necessary equipment for oil drilling, therefore Asia-Pacific is the largest market and China held the maximum share in demand of OCTG products, which has suffered half of API's share of the Asia Pacific Oil Pipeline. America Market is the most influential market. There are large offshore drilling activities in Golden Triangle, Mexico Bay, West Africa. As a result, the demand for high quality oil pipe grades will increase in the above areas. In addition, Russia, another key oil and gas producing nation, will see oil and gas pipe demand rise at a strong pace.

Which country or regions need OCTG?

pipeline construction

Global demand for oil pipelines is expected to increase by more than five percent per year to close to 55 million metric tons by 2017. The demand for different countries and regions are not the same, the demand for oil pipeline will be especially strong in the area of development and the construction of energy infrastructure will increase the demand for the line pipe. China, which dominates oil and gas pipe demand in Asia, will experience solid growth as it continues to construct energy infrastructure, particularly in the gas segment. Demand in Africa will grow because of the development of offshore wells off the west coast. In addition, the Middle East will have strong gains resulting from sustained growth for large producers, such as Saudi Arabia. With a strongly expanding offshore sector, including considerable activity in pre-salt zones and increased onshore activity, demand in Brazil will increase as well. In North America,Oil and gas pipe demand will benefit from the development of shale plays,Line pipe demand in the region will benefit from the additional infrastructure built to transport oil and natural gas from the well site.

What is the price of the oil pipe?

In recent years,world oil demand growth slowed, but oil supply continues to grow, the market supply and demand facing relaxed, international oil prices are still low levels. At the same time, the international oil price of the roller coaster situation will have a great impact on the oil drilling industry.

Oil price trends

oil prices graphic

By 2016, economic recovery in the developed economies have improved somewhat, But remain weak oil demand. Emerging economies are slowing down, boosting oil demand underpowered. World oil demand is expected in 2016 to 95.5 million barrels / day, an increase over the previous year by 1.1 million barrels / day, lower than the 2015 growth rate. Non OECD (Organization for Economic Co-operation and Development) countries are still the main source of demand growth, an increase of 1 million barrels per day over the previous year. From the country, the oil demand growth will come from China, India and the United States. 2016, non OPEC oil production will be reduced by 500 thousand barrels per day over the previous year, to 57 million 700 thousand barrels / day. OPEC oil production continues to grow. Oil revenues is OPEC's core interests, under the threat of unconventional oil resources, alternative energy, new energy and renewable energy,to defend the market share and ensure the position of OPEC oil in the global energy supply system will be the core of its long-term strategy. Therefore, the possibility of reaching a reduction agreement in 2016 is still small, but with the deepening of the degree of financial pain in OPEC countries, there is not rule out the possibility of its decision to cut the appropriate. Overall, oil inventories still further accumulation on a global scale in 2016, thereby limiting the rise in oil prices.

Price trend for OCTG

In the state of global oil prices depressed, what is the price of the oil pipeline? Asian and African oil pipe markets, the price of oil pipe slightly rise, but compared with previous years, the demand is not as good as before. Traders' demand is slack, and money is a key factor in the purchase of oil casing. And the increase in railway costs, steel mills may continue to raise prices, the issue of steel prices has become one of the issues of concern. Compared to Asian and African markets, America's casing price remains stable. In recent years, American countries have been on the development of shale oil production and offshore drilling, so the demand will continue to increase. Experts estimate that this year's oil casing market will continue in the weak state and prices will rise slightly, but overall remained stable.

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