A quick look at a few of the bigger things affecting our business this week.
Steel: Another $10. Nucor moved hot-rolled coil to $1,230/ton in its October 5 customer letter, with its West Coast joint venture at $1,290. That’s more than 40% above this time last year, when spot hot-rolled was running $825 to $865. Mill lead times are still long, and the supply shortage on sheet and plate is expected to carry into the fourth quarter. Nothing here says relief is close.
Oil: Prices moved up this week. Brent settled Friday at $104.72, up about 2.4%, and WTI at $91.85, up about 0.8%. Alaska crude moved more: ANS was $116.94 as of Saturday, up from $107.54 a week earlier, its highest level in weeks. Two things drove it. Hurricane Isaias shut in roughly 70% of U.S. Gulf offshore oil output, about 1.5 million barrels a day, and attacks on Saudi Arabia and Middle East tankers kept the premium on international crude. Talk of progress with Iran and China restarting fuel exports took some of the edge off. The EIA now expects Brent to average $105 in the fourth quarter, $14 higher than it forecast a month ago, and it points to tight diesel supply as a big part of the reason.
North Slope: Activity keeps building. Narwhal Exploration has filed to drill up to three on-ice winter exploration wells in nearshore West Harrison Bay in the Beaufort Sea. The state approved facilities work at Prudhoe Bay. State lease sales for the Beaufort Sea, North Slope, and North Slope Foothills open for bidding next week, October 20. Winter drilling season is also close, which is when a lot of our Slope work gets planned. If you’re lining up a project, now is the time to get it scoped and priced.
Infrastructure: No change. Federal highway and transit programs are funded through December 11, and a longer-term bill most likely waits until after the elections. Core formula-funded highway work is steady, while some grant-funded programs are working with less.
Bottom line: Steel keeps climbing on tight supply, oil and especially Alaska crude jumped on a Gulf storm and Middle East risk, and the North Slope is heading into a busy winter. Reach out if you want to talk through what any of this means for your project.