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Last updateFri, 03 Jul 2015 10am

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U.S. Rig Count Up for First Time in 2015

The U.S. rig count has ended a 28-week slide, reporting the first addition of rigs since Dec. 5. According to Baker Hughes, 859 rigs were active as of last Friday. While the overall count increased, the number of oil-directed rigs continued to drop.

The number of oil-directed rigs slipped three to 628, with the Permian and Williston basins losing 2 and 3 rigs, respectively. The Eagle Ford stayed flat with 83 oil-directed rigs. 

U.S. Specialty Chemicals Market Softens in 2015

The Specialty Chemicals Market Volume Index, a new tool created by the American Chemistry Council (ACC), remains on a soft note, falling 0.4% in May from the previous month, on a three-month-moving average (3MMA). This follows steady declines since December as weakness in oilfield chemicals and a few other segments weighed on overall volumes. Of the twenty-eight specialty chemical segments monitored, eleven expanded in May, fourteen declined, and three were flat.

The overall specialty chemicals volume index was up just 0.6% year-over-year (Y/Y) also on a 3MMA basis. Year-earlier comparisons were generally in the 4.0% to 6.8% range since January 2012, but since February of this year they have been below that range as the downturn in the oil and gas sectors affected headline volumes. Still, on a Y/Y basis, gains are fairly widespread among most market and functional specialty chemical segments and, in some cases, they are improving. 

Why Houston Could Avoid “Oil-Related Recession”

“The construction of new petrochemical plants, which are benefiting from cheap commodity prices, will offset much of the Houston area’s job losses and give oil prices more time to rebound,” says the University of Houston’s Bill Gilmer.

The Houston area “will add about 13,000 jobs, or about 0.5% growth, in 2015, down from more than 100,000 new jobs in 2014. Next year could range from 15,000 jobs added to more than 60,000, depending on oil prices. A more thorough recovery could come in 2017,” The Houston Chronicle reports

Analysis: U. S. Petrochemical Expansion Helped by Foreign Investment

The U.S. petrochemical market will see a sharp increase in investment in ethylene production and derivatives capacity from foreign chemical and petrochemical manufacturers, totaling at least 10 million tons of new production per year by 2025, according to a recently released report from Petrochemical Update.

To date, about 25 companies, some at multiple locations, have announced they plan to build new crackers or to expand existing ones, 12 of which are foreign players, according to the report.

Fuel Prices Make U.S. Manufacturing Costs as Low as China

The Boston Consulting Group (BCG), “estimates the average cost to manufacture goods in the U.S. is now only 5% higher than in China and is actually 10% to 20% lower than in major European economies. Even more striking: BCG projects that by 2018 it will be 2% to 3% cheaper to make stuff here than in China,” Fortune reports.

The biggest single factor in the narrowing of this gap “is that fracking has helped dramatically drive down the price of oil and gas that’s being used in energy intensive industries such as steel, aluminum, paper and petrochemicals. BCG calculates that U.S. industrial electricity prices are now 30% to 50% lower than those of other major exporters.” 

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Valve Magazine Digital Edition

15 SPR CVRInside the Spring 2015 issue…

• Heavy Oil
• 3D Printing Gains Momentum
• Restoring Power After Sandy
• What is a Surplus Valve?