The U.S. base oil market is dormant and likely to remain so for several weeks, but suppliers say the calm does not preclude chances for price movement. Sources said this week that price cuts are possible and uncertainty continues to rule the market.
The current quiet is partly due to the fact that some of the markets players are still on holiday. But the lubricant industry is also in the midst of a seasonal lull that typically lasts until late February or March. Base oil suppliers and purchasers say they are waiting to see if lube demand returns to normal levels after a fall-off during the second half of 2001.
Producers hold differing opinions about the likelihood of price changes in the meantime.
Just because things are quiet doesnt necessarily mean that the market isnt facing the same issues it always faces, one base oil marketer said. If margins are healthy, which they are right now, theres a possibility for price cuts.
Others pointed to the recent rise in crude oil prices, after the Organization of Petroleum Exporting Countries announced production cuts Friday. Crude climbed $1.17 Wednesday to close at $21.01 per barrel on the New York Mercantile Exchange.
I would assume that posted prices are not going to fall any more, a base oil marketer said. Crude is firming up and I just dont see an unusual amount of spot deals being cut. I think things are pretty stable now.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.
|
|