There was limited action in the U.S. base oil market this week as year-end vacations and holiday festivities were underway. Posted prices held unchanged following a recent round of API Group I decreases earlier this month. There was no fresh discussion that Group II/III producers may issue price cuts. The last full round of Group II and III posted price adjustments took place in November, along with Group I and naphthenic price reductions.
Not all was too gloomy in the activity department, as a few suppliers said that they experienced a flurry of demand last week; but admitted that business had since slowed in the past day or two.
In some situations, producers concur that they will be ending the year with reasonably balanced inventory positions. Depending on grade, some base oils are more readily available while other cuts are on the tight side.
Sources said that with a couple of maintenance programs expected during the first half of 2013, some suppliers were not eager to participate in spot activity, as they will preserve inventories for contractual requirements. Sellers also pointed out that they were not willing to slash prices in order just to move some surplus.
The Holly-Frontier turnaround that commenced about seven weeks ago, was understood to be in the early stages of start-up.
At the close of the Tuesday, Dec. 18, CME/Nymex session, front month light sweet crude oil futures ended the day at $87.93/barrel, up by $2.14/bbl from last weeks settlement at $85.79.
Brent Crude was trading at $108.94/bbl at the end of the day yesterday, up by 82 cents/bbl from its week-ago level of $108.12. LLS (Light Louisiana Sweet) crude was trading at a premium of about $21.75/bbl to WTI on Tuesday.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.