While demand from domestic consumers was described as healthy, buying appetite for exports has begun to wane, as buyers have started to plan supply needs for the summer season.

European requirements, in particular, seem to be less vibrant than at the beginning of the month, sources said. This was partly attributed to the fact that cargoes acquired now would be arriving in Europe during the summer holiday period, when activity in downstream segments typically declines.

Several plant outages in the U.S. were impacting domestic supply levels, with at least two plants currently undergoing turnarounds and a couple more shutdowns anticipated in the next few weeks.

In California, Chevrons base oil plant in Richmond was heard to be off-line for maintenance, according to sources. The Richmond facility can produce 20,700 barrels per day of Group II base oils (according to LubesnGreases Global Guide to Base Oil Refining) and was expected to be brought back on line in the next few days.

One of Motivas base oil trains at Port Arthur, Texas, was also heard to be down for maintenance. The unit was taken off line in May and was expected to be restarted before the end of June, once maintenance work was completed.

A second train at the Port Arthur refinery was anticipated to be taken off-line once the first train was brought back on stream, sources said. Motivas base oil plant can produce 40,300 b/d of Group II base oils when the three trains are running at full capacity.

Reports also circulated that Petro-Canada would be taking its Mississauga plant off-line for four to six weeks in August. The plant has capacity to manufacture 11,600 metric tons per year of Group II and 4,000 b/d of Group III base oils.

There was no producer confirmation forthcoming about the turnarounds.

Upstream, crude oil futures slid into bear market conditions, which are defined as a drop of at least 20 percent from a recent peak. The drop was attributed to general oversupply concerns. U.S. shale oil drillers – who are not part of OPEC – have increased output in recent months, disrupting OPECs efforts to trim production and stabilize oil prices.

West Texas Intermediate futures on the CME/Nymex traded at $43.23 per barrel on June 20, compared to a peak on Feb. 21, when crude settled at $54.33/bbl, reflecting a 21 percent decrease. WTI futures settled at $46.46 per barrel on June 13.

Light Louisiana Sweet wholesale spot prices closed at $46.19 per barrel on June 19, and had settled at $48.20/bbl on June 12, according to data from the U.S. Energy Information Administration.

Brent was trading at $46.02/bbl on the CME on June 20, down $2.70/bbl from $48.72/bbl on June 13.

Low sulfur vacuum gas oil (VGO) was at July WTI plus $8.50/bbl ($52.70/bbl), and high sulfur VGO was at crude plus $6.50/bbl ($50.70/bbl) on June 19, according to data from PetroChemWire. Numbers were lower than a week ago, when low sulfur VGO was at $54.48/bbl, and high sulfur VGO at $52.48/bbl.

Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.