Stable pricing and consistent demand continue to characterize the U.S. base oil market, although the first intimations of a seasonal slowdown have started to emerge.
Suppliers noted that it is normal for August business to be less robust than in July as activity in downstream segments tends to ease in the fall.
Nevertheless, with the exception of a few grades, requirements continue to stream in and are deemed relatively balanced against supply.
These conditions, together with steeper crude oil prices during the week lent stability to current postings, sources said.
In the API Group I and II categories, the mid and heavy-viscosity grades have commanded the most attention in terms of requirements over the last several months and are therefore in more limited supply than the lighter cuts.
Within the Group III segment, offtake has been steady, with the 6 centiStoke cut in a tighter position than the other oils – not only in the U.S., but in other regions as well – allowing suppliers to maintain current offer levels.
Buying appetite for U.S. paraffinic base stocks from Europe has declined due to the absence of players during the summer holidays, and there is some downward pressure on export price ideas.
Some interest continues to be seen in Brazil and India for U.S. cargoes, but buyers expect volumes to move at lower price levels than in previous weeks.
Steady conditions were prevalent on the naphthenic front, with no price revisions mentioned this week. Supply and demand remained balanced, and plants were running at optimum rates, sources said.
Upstream, crude oil futures hit five-week highs on Monday, jumping more than 10 percent over a three-day rally, as there was growing speculation that producers would agree to an output freeze amid a crude glut.
The members of the Organization of Petroleum Exporting Countries are expected to meet on the sidelines of the International Energy Forum in Algeria on Sept. 26-28.
WTI futures settled on the CME/Nymex at $46.58 per barrel on Aug. 16, up $3.81 per bbl from the Aug. 9 settlement of $42.77 per bbl.
Light Louisiana Sweet wholesale spot prices closed at $47.42 per bbl on Aug. 15, up from $44.71 per bbl on Aug. 8, according to data from the U.S. Energy Information Administration.
Brent was trading at $49.23 per bbl on the CME on Aug. 16, up $4.25 per bbl from $44.98 per bbl on Aug. 9.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.