October was a good month for day rates, enabling U.S. Gulf oil service vessel operators to make up some ground after a sluggish third quarter.
Several vessel operators negotiated higher rates that kicked in during October while others said that they would submit rate increases during the month. Part of the rate increase is due to Hurricane Ike, most notably on the spot market, as virtually every available supply vessel and crewboat was under contract. Some were commanding spot day rates 30 percent to 40 percent above typical contract rates.
As a result, OSV operators reported that average day rates increased in every vessel category except for large crewboats.
As expected, supply vessels posted the largest rate gains during October with average increases of $1,300 to $1,500 a day. Crewboat operators saw modest gains for smaller boats and a small dip in rates for larger crewboats. It should be noted that the gains came after there was little activity in the Gulf for several weeks in September due to the hurricanes.
The news wasn’t as good in the rig market.
In October, according to ODS-Petrodata , Houston, the Gulf rig fleet decreased by two rigs, from 122 to 120. This is in addition to the three jackup rigs that were destroyed during Hurricane Ike in September. More importantly, the number of rigs under contract during October fell by four, from 97 to 93. As a result, rig utilization decreased during the month from about 80 percent to 77.5 percent.
The rig market may not improve next year if ODS-Petrodata’s forecast is correct.
Company analysts are predicting that average jackup demand will be about 63 rigs, well short of the average marketed supply of about 70 jackups in the U.S. Gulf. ODS is also forecasting an average semisubmersible surplus during 2009 of two rigs. The drillship market is expected to be in balance. SClB