While the U.S. base oil price market remains quiet, an industry source told Lube Report that spot proposals, which can provide prices below posted prices, are proving an option in some cases for buyers seeking a discount and sellers looking to move excess product.
Right now, depending on the visgrades, there are spot opportunities to be had on light and mid neutrals, the source said. It depends on the supplier, but in both the Gulf Coast and the Northeast, there are spot opportunities available. Youll see spots when theres length in the market, but you wont see a lot of spots obviously when things are tight.
This source explained that when a refinerys tanks start getting too full, it can either drop its prices to encourage people to buy more, or it may prefer to approach some select customers to offer spot opportunities.
Typically what theyll do is theyll offer spot proposals, or deep discounts, to folks who can preferably – maybe even ideally – take it offshore, the source explained, adding that spot proposals dont necessarily require a contract. If you move it out of the region, it does not impact the market pricing locally.
Posted paraffinic base oil prices are unchanged in the United States this week. Crude closed at $63.10 per barrel yesterday on the New York Mercantile Exchange, according to Bloomberg. That was $1.21 above the price a week ago.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.