The Speartip Sentinel Intelligence Report

“Softening… Is a Mirage. Time to Act.”

By Ryan Hunt, CEO, Speartip TubularWeek of August 25, 2025

We are in full 2026 prep mode now. Basin-focused. Zeroed in on the ideal customer. 2025 isn’t the target; it’s the setup. This year’s been about positioning Speartip and our customers for the next market dynamic, not chasing ghosts of 2025 budgets. So, the question on the table: Are operator budgets blown for 2025? Or is this just the deep breath before the next run?

Let’s dig in.

Inflation Is Still in the Pipe, Even if CPI Says Otherwise

The headline inflation rate remains at 2.7%, unchanged from last month. But that doesn’t tell the whole story. Core inflation, which the Fed watches like a hawk, ticked up to 3.1%, the highest level since February. That’s a direct signal that price pressures are alive and well, especially in industrial supply chains.

In the pipe world? It’s showing up in steel, collar pricing, finishing services, and freight. You're not imagining it. Replacement costs are sticky & firm - and they’re not floating down anytime soon.

Prime Rate Remains at 7.5%, Capital’s Still in Lockdown

The Fed Prime Rate is still sitting at 7.5%, with Fed officials continuing to hold the line on cuts. Powell hinted at “patience,” citing risks from inflation and global instability. That means capital stays sidelined, especially from E&P firms running lean and trying to preserve cash ahead of what may be a tighter 2026.

Distributors aren’t buying pipe unless it’s tied to existing drilling schedules or completions. Long-cycle projects remain off the table until the cost curve softens, or oil pricing justifies bigger risk.

Oil & Gas Demand: Slippery but Stable

Oil: Brent has pulled back to around $68bbl, with EIA forecasting a slide toward $58 by Q4. Inventories are building, and OPEC+ isn’t blinking. Shale output’s holding, for now, but drilling discipline is the anchor.

Gas: Henry Hub is hanging around $2.68/MMBtu, thanks to healthy storage and steady production. But strip pricing into 2026 is climbing above $3.50+, supported by strong LNG export demand and increasing electrical load growth across the U.S.

The net result? Demand is still there, but not strong enough to push rigs into breakout mode.

Rig Count: Flatlined at 539

Last week’s U.S. total rig count remained at 539, unchanged week-over-week. Oil rigs ticked up to 412 (+1), while gas rigs dropped to 122 (-1), keeping the mix balanced but stagnant. Land rigs also held at 524.

Basin action:

• Permian: down 1 to 256

• Haynesville: down 1 to 41

• Cana Woodford: got hammered, down 4 to 15

• Other Basins: picked up 4 rigs, signaling smaller opportunistic moves in fringe acreage
  

There’s no upward trend here, just quiet reallocation. And with Brent pricing looking down, don’t expect a Q4 rig run without some geopolitical fire.

Frac Spreads: Down 77 Year-Over-Year

Frac spreads dropped another 4 last week to 163, bringing the YoY decline to 77 units. That’s a flashing red light on completions, and it’s directly tied to service cost pressures and flat pricing. The work is still being done, but it's being done slower, with fewer crews.

Production Still Firm, But That Might Not Last

• Lower 48 production: holding at ~12.9 MMBPD

• DUCs (Drilled but Uncompleted wells): dropped by 55 in July

  • Permian: -14

  • Bakken: -13

  • Rest of Lower 48: -19

  • Eagle Ford: +3
    

This slow, steady DUC draw is the only thing keeping output flat. But it’s a fading buffer. If rig activity doesn’t rebound soon, production could start to slip into early 2026.

Steel Pricing & OCTG Update

• Hot Rolled Coil (HRC) is holding firm at $875–$880/ton

• Collar pricing is up, and heat treat + finishing services are now pushing into longer lead times
  

Prices are steady, but they’re not soft. The upward pressure is real, just hiding behind flat rig counts.

Tariffs: Section 232 Isn’t Going Anywhere

Any optimism about steel tariff relief is, at best, misinformed. The current administration hasn’t moved to repeal Section 232, and if anything, it’s expanded its reach to include home appliances, locomotives, and motorcycles.

That means:

• Landed pipe stays fully exposed

• Unlanded pipe might carry a different cost, but likely not a better one

• Refunds? Don’t bet on it

The two-tier pipe market could be on the table.

Q4 Inventory Pressure Is Building Now

Every distributor with inventory in Harris County, TX knows what’s coming: a 2.5% ad valorem tax on goods held on December 31. That’s why Q4 restocking is already stalling, and why distributors are only buying to fulfill committed orders and programs.

Translation: if you don’t line up your Q4 or Q1 needs in September, you’ll either pay more or get less.

The Speartip Action Plan

1. Secure inventory now—You’re not overbuying. You’re hedging against an empty pipeline. Remember Q4 2024 with 9 ⅝”, 13 ⅜” and L80 Tubing!

2. Factor in service delays—Threading, heat treat, collars; it’s all slowing down when pipe dumps into the ports in January.

3. Run your 2026 scenarios now—Q4 is the bridge. Don’t miss it.

4. Prepare for two-tier pipe pricing—Landed vs. unlanded pipe is a game of timelines.

5. Trust Speartip to stay ahead—We’re tracking every piece so you don’t have to scramble.
   

Final Word

Inflation isn’t behind us, it’s just wearing a different uniform. Rigs are flat. DUCs are down. Completion crews are thinning. Tariffs are expanding. And the year-end tax is already shaping supply behavior. Don’t wait for the “market to move”; the movement is already happening beneath your feet. Please consider these things when planning your operating budgets for 2026.

Speartip isn’t just your supplier; we’re your forward observer.

We’ve got your six. Let’s move.

—

Ryan Hunt

Founder & CEO, Speartip Tubular

"We move as one. And we move fast."