Despite a reduction in activity levels in some segments of the base oils market, demand was generally described as steady for many grades, with supply appearing more well-balanced against requirements than anticipated. Orders in the API Group I segment were coming in at expected levels for this time of the year, and given a fairly recent turnaround and several export transactions, supply was not as abundant as for the Group II cuts. The Group III base oils have also achieved a more compatible supply and demand position, but fresh import shipments may tip the balance towards oversupply, with the heavy grades experiencing heftier downward pressure.
While there have not been any adjustments to posted prices, buyers commented that competitive movements continued among suppliers in the spot arena. Domestic demand has dwindled as compared to a month ago, and export opportunities into Europe were heard to have declined as regional supplies were deemed more than adequate to meet sluggish demand levels. Negotiations for next year’s supply contracts were heard to be taking place amid buyers’ pressure for producers to lower prices on expectations of oversupply conditions.
Crude oil prices offered little price direction, as recent developments have kept futures largely range-bound. Oil traders did not show much of a reaction to news that OPEC+ planned to increase production in December and then keep output largely unchanged in the first three months of 2026.
The trade tensions that ensued from United States President Donald Trump’s sweeping tariffs on a variety of imports saw a slight easing as Trump met with Chinese President Xi Jinping in South Korea last week to finalize details on a trade agreement. The two leaders agreed to a reduction of tariffs on some Chinese goods entering the U.S. and China’s suspension for one year of export controls on rare earths, which are critical for the manufacture of many products, from electric vehicles to smartphones. Trump said China will also buy “massive” amounts of soybeans and other farm products from the U.S. While these terms were more favorable than the 100% tariff on Chinese goods that Trump had threatened to impose before the meeting, many Chinese products and raw materials will still be subject to steep levies, increasing production costs for manufacturers who depend on these imports to keep operations running.
Group I
The Group I segment continued to display some tightness, particularly for the light grades, as requirements came in at a fairly steady pace and recent production issues had strained supplies. A brief unplanned shutdown at Calumet’s Group I and Group II unit in Shreveport, Louisiana, a couple of months ago had contributed to a tightening of spot supplies, but the producer was heard to have built inventories, was meeting contract commitments and had some spot availability, according to sources.
Bright stock was still seeing healthy demand from the domestic market, although it was less robust than early this year, and prices appeared to have stabilized. There has been an uptick in buying interest for bright stock from Brazil as local supplies have tightened due to an unplanned outage at a local base oils plant.
The Group I heavy grades in general were more readily available than their lighter counterparts, but extra supplies were limited for all grades and export business was muted. Demand from Europe, which had been one of the targets for U.S. exports about a month ago, has subsided as European inventories have grown and consumption levels have weakened, stifling buying appetite for fresh imports.
Regular shipments of U.S. products to Mexico continued, even though base oil demand in the neighboring country has weakened due to economic uncertainties that dampened lubricant consumption. Mexican buyers typically wait until the last few weeks of the year to purchase additional supplies from U.S. producers who are eager to lower inventories ahead of the year-end tax assessments.
Buying appetite from Brazil for U.S. base oil barrels was less intense than in the first half of the year as well, and was said to have weakened due to an economic slowdown which was partly attributed to the ongoing tariff war with the U.S. Brazilian President Luiz Inacio Lula da Silva said on Tuesday that he would call Trump again if talks between the two countries did not show any progress by the end of COP30, the United Nations climate conference that Brazil is hosting this month. Trump increased tariffs on U.S. imports of most Brazilian goods to 50% from 10% in August.
For the time being, many Brazilian buyers preferred to use up existing inventories and purchase base oils from the local producer instead of running the risk of securing U.S. products that may lose value at a later date. There were also expectations of attractive Group II offers emerging from the U.S. over the next few weeks, once the turnaround at Excel Paralubes’ Group II/Group III plant in Louisiana is completed, as many blenders prefer to use Group II base stocks when prices are competitive and formulations allow substitution.
Group II
All eyes in the Group II segment have been on the turnaround at Excel Paralubes’ Group II/Group III plant in Lake Charles, Louisiana, which began in early October. The producer had built inventories to cover requirements during the shutdown, but participants expected spot supplies to tighten. The plant had been running below nameplate capacity for most of the year and additional output was expected to be achieved once the turnaround was completed. The outage was also taking place at a time when demand generally slows down, which could offset the reduced supply levels. There was no direct producer confirmation about the plant’s operations.
Motiva was also heard to be rebuilding its inventories following a shutdown at its Group II/Group III unit in Port Arthur, Texas, in August/September, which had tightened spot supplies for certain grades, according to sources.
Spot prices were said to be softening as buyers’ price expectations have been adjusted down in line with increasing inventories and additional pressure on suppliers to place the extra barrels held during the hurricane season before year-end.
Plentiful supplies of rerefined base oils have started to place pressure on prices as well, particularly on the light-viscosity grade, although strong contract business continued to draw on current supplies and at least one rerefiner was heard to be sold out of most grades. A turnaround at a rerefining unit this month could tighten supplies, at least in the short term.
With the return to production of the Excel Paralubes unit, there are expectations that additional spot supplies will emerge, pushing suppliers to seek export opportunities into destinations such as India, although Indian base oil demand has been slightly sluggish as well.
Group III
The Group III segment has managed to achieve a more balanced supply and demand ratio, despite the recent arrival of imports. Most of the supplies appeared to have been placed, but fresh cargoes were heard to be on their way, which could tilt the current balance towards oversupply. However, at least one supplier was understood to have reduced the volumes shipped to the U.S. as it has found takers at higher prices in other regions. Group III base oils consumption from the PCMO segment has slowed down, and this, coupled with Group III production at domestic facilities, was dampening U.S. demand for imports.
Spot prices for the Group III 4 cSt grade were maintaining a steady course, but ample availability of the 6 cSt and 8 cSt cuts has led to decreases of a couple of cents per gallon, according to sources.
The impact of Excel Paralubes’ turnaround at its Group II and Group III plant in Lake Charles, Louisiana, this month was expected to be limited as the unit produces Group III base oils for the company’s own internal consumption. Excel Paralubes does not comment on its production status.
Naphthenics
A balanced-to-tight supply situation as a result of a turnaround at a key facility and range-bound crude oil futures continued to offer support to stable prices for the light grades. These pale oils were said to be snug against demand as activity in the transformer oil and infrastructure segments was healthy. On the other hand, the heavy pale oils have seen prices slip as demand weakened at the end of the summer driving season since most requirements come from the rubber and tire industry.
Ergon’s naphthenic base oils plant in Vicksburg, Mississippi, was shut down from early September until mid-October to undergo a comprehensive maintenance and upgrade program. The company had built inventories to cover contract commitments before starting the turnaround, but spot supply from the producer had been restricted. The unit resumed production in mid-October as planned and was heard to be ramping up operating rates.
Crude
Crude oil futures extended losses on Tuesday after an industry report indicated a large increase in U.S. inventories, deepening concerns about oversupply. OPEC+ announced a modest hike in crude oil output for December, but will pause any increases for the first quarter of next year.
Meanwhile, Russia’s seaborne oil shipments fell the most since January 2024 last month, after U.S. sanctions on producers Rosneft and Lukoil prompted major buyers India and China to largely avoid purchases of Russian oil.
- West Texas Intermediate December 2025 futures settled on the Nymex at $60.56 per barrel on Nov. 4, slightly up from $60.15/bbl for front-month futures on Oct. 28.
- Brent futures for January 2026 delivery were trading on the ICE at $64.89/bbl on Nov. 5, up from $64.53/bbl for front-month futures on Oct. 29.
- Louisiana Light Sweet crude wholesale spot prices were hovering at $62.79/bbl on Nov. 3. Spot prices had settled at $63.53/bbl on Oct. 27, according to the U.S. Energy Information Administration.
Diesel
Low-sulfur diesel wholesale, Nov. 3 (Oct. 27), EIA
New York Harbor: $2.46 per gallon ($2.49/gal)
Gulf Coast: $2.32/gal ($2.34/gal)
Los Angeles: $2.51/gal ($2.58/gal)
Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com
LNG Publishing Co. Inc./Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.
Posted Paraffinic Base Oil Prices November 5, 2025
(Prices are FOB basis, in U.S. dollars per gallon and U.S. dollars per metric ton).
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