Oil well cement use facing multi-decade lows on plummeting well drilling activity

Global API, API-equivalent and nonconforming oil well cement demand is down by more than 30 percent from the peak nine million ton volume reached in 2013 to low five million tons, including extenders.

Based on the prevailing crude oil price outlook and associated activity in oil, gas and thermal well drilling, the demand for the specialty oil well cement is nonetheless expected to stabilize into the coming year and show modest recovery between 2015 and 2020, according to CW Research's study on ÔÇ£World Oil Well Cement Markets & OutlookÔÇØ.

ÔÇ£The oil industry is undergoing its worst contraction in decades, with crude demand growth decelerating on Chinese slowdown and global economic uncertainty. In 2016, crude prices have hit some of the lowest levels in 15 years, even though we have seen periodic mini-rallies, followed by reversals and more uncertainty. Consequently, well drilling activity and rig operations, particularly in North American shale fields, have come to a grinding halt as exploration and oil field service companies reduce expenses,ÔÇØ says Robert Madeira, CW Group Managing Director and Head of Research.

CW Research's World Oil Well Cement Markets & Outlook expects the drop in rig counts to continue until oil prices stabilize. The two major drivers for oil well cement demand are the number of wells drilled and the average depth of these wells, which the report details by region and their relative cement consumption rates. The decline in shale drilling in the United States and the slowdown in Chinese demand are among the most important drivers behind the decline in oil well cement consumption; the two countries accounted for 69 percent of total wells drilled and 63 percent of total oil well cement consumption in 2015. CW Research expects drilling to improve moderately over 3-5 years.

More highlights from the CW Research's World Oil Well Cement Markets & Outlook: http://www.cwgrp.com/news/research/433702-oil-well-cement-use-facing-multi-decade-lows-on-plummeting-well-drilling-activity-outlook-stabilizing-but-remains-uncertain 

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