(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor – As covered in more detail in the OCTG section of this report, M&A activity in the US oilfield combined with global economic and political events has lowered support for the rig count upside. Reduced upstream activity puts downward pressure on demand for linepipe. The impact of longer well laterals on linepipe consumption will continue to push gathering systems to larger diameters. The outcome is higher weight per foot but fewer total miles of pipe: a net loss in tons required. As a result, our forecast has moved down slightly. LNG has been heavily covered in the last several editions of this report. Shortly after our last report, the Biden Administration placed a temporary pause on pending LNG export applications. The move, widely considered to be an election-year tactic, introduces further uncertainty into the US energy operating landscape. At a time when flaring restrictions are leading to spikes in gas production, this pause could roil the markets for the bounty or newly captured gas. The pause directly impacts four projects that have pending export permit applications filed with the US DOE: Commonwealth LNG, Sempra (Train 3 & 4 expansion), Lake Charles LNG, and Magnolia LNG, which combine for a total of 6.3Bcf/d export capacity. The timeline of these projects puts their impact beyond our 2024 forecast. Import Supply – The December import total was 99,315 tons which was nearly 14,000 tons below the license tally from last month. January import licenses ended the month down 27,500 tons compared to the linear forecast at 80,641 tons. The February linear forecast, with 8 of 21 days summed, is appears to stabilize at ~81,000 tons. Carbon, welded, over 4-1/2”, less than 16” is back on top of line pipe imports for the month of December 2023, with 27,000 tons. The price was $1,169/ton.
Preston Pipe Report – February 2024
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