Pressures Rising Beneath the Calm Surface

“Oil prices at the bottom? NG prices heating up. Inventory standoff. Time to act.”

We’re well into the 2026‑prep mode. Your competition hasn’t pivoted yet; they’re still chasing 2025 budgets and hoping for a bounce. But you and Speartip aren’t waiting: we’re basing every decision on what’s next, what’s coming, and what matters for the OCTG market now.

Are operator budgets already busted for 2025? Tariffs, high steel costs, service inflation and a flattening demand curve say: maybe. Let’s dig in.

Inflation: Calm on the Surface, Pressure Underneath

The U.S. inflation rate currently sits around 2.9% (12‑month) according to recent CPI estimates. Yet, core categories and industrial‑input costs are behaving differently: the consumer sees normalcy; supply chains don’t.

In OCTG procurement: Steel, collars, heat treat and finishing services still carry elevated cost structures. Replacement‑cost inflation may be disguised by benign headline CPI, but the proxies are there.

Prime Rate / Capital Funding: Still Tight

The U.S. prime rate is sitting near 7.25%–7.5% as of mid‑October. With rates this high and uncertainty about future cuts, upstream capital remains cautious. Oil & gas players continue to focus on existing programs, completions and maximizing cash flow, not launching big new rigs or wild spec builds.

Demand Signals: Oil Flat, Gas Poised for Lift

Oil: Global demand growth remains modest and, in some forecasts, set to slip. Oversupply continues to lurk. A recent note reported the U.S. rig count up slightly, but from a low base.

Natural Gas: With winter coming, exposure rises. Storage is healthy now, but as LNG export and domestic demand climb, the curve favors higher prices into late 2025 / early 2026. Delayed investment in rigs and completions may set the stage for supply tightening.

Rig Count, DUCs & Completion Activity

The latest data from Baker Hughes show a slight drop to 547 active rigs, down 7% YoY. Oil rigs fell by 4 to approx. 418; gas rigs rose by 2 to 120.

DUC inventory is being drawn down modestly, but not aggressively, so production remains mostly flat for now. As decisions get delayed, the buffer shrinks.

The takeaway: activity is stable but subdued. That means demand for OCTG is flat‑to‑soft. If you wait for a spike, you’re likely late.

Steel & Input Costs: Not Cheap

Hot Rolled Coil (HRC) pricing remains elevated: recent data show U.S. Midwest HRC futures around $813/ton as of October 20. That’s a significant cost basis for OCTG procurement.

The service chain (collars, heat‑treat, threading) remains capacity‑constrained. In short: your cost floor is high, and lead‑times remain longer than pre‑tariff / pre‑disruption norms.

Inventory & Distribution: Q4 Stretch Incoming

Distributors are holding back Q4 inventory buys. With demand softening and the looming 2.5% ad valorem tax in Harris County, TX for inventory held December 31, the game is shifting. What’s on the ground now is likely all you’ll get until mid‑ or late‑January. That means size selection, grade availability, and service choices will shrink.

Your window: early booking, firm specs, early commitments; anything else is guesswork.

Policy & Tariff Watch

Tariffs still loom large. Section 232 remains unresolved; some analysts even expect expansion rather than contraction. Relief? Maybe. But not for inbound pipe. Which means a two‑tier market could be forming:

• Landed inventory = reduced cost, full risk of waiting for new material to arrive - delaying projects.

  
  

• Incoming inventory = full cost, full risk (maybe)

  
  

Commentary from Chris Wright and others reinforce the strategic pivot to U.S. energy dominance, but the supply‑chain ripple is still in motion. Drill baby Drill is not a reality…an echo of hope & change.

Speartip’s Path Forward

Despite the softness elsewhere, Speartip is growing at “tremendous rate.” Why? Because we’re leaning forward while others hesitate. We're targeting our ideal customer now. We’re locking the value chain early.

Here’s the action plan:

1. Lock inventory now for Q4/Q1 work—even if the quote looks high.

2. Secure service capacity—heat‑treat, threading, finishing require early booking.

3. Build buffer time—lead‑times are stretched; delays are structural.

4. Consider two‑tier cost planning—landed vs new; cost variance will widen.

5. Use Speartip’s market intelligence to pre‑empt your competition.

   
   

Final Word

Oil prices may feel like they’re at the floor, but that floor is higher than you think. Natural gas is quietly setting up for a winter move, and the supply‑chain shocks you expect next year are already forming now.

If you wait for the noise to start, you’ll already be behind.

Speartip isn’t just your supplier—we’re your strategic advantage.We’ve got your six. Let’s move.

—

Ryan Hunt

Founder & CEO, Speartip Tubular

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