Dated Brent is maintaining around $109 per barrel and gaining a reputation for stability against recent realignment when prices fell below $107 in the past week. WTI has weakened to around $98 per barrel, increasing the crack between the two markers, perhaps underlining an inherent weakness in the crude. ICE gas oil is front month trading at around $921 per metric ton, decreasing the differential between this product and the mean price for European export SN 500, taking more pressure off the need for base oil prices to show higher realizations through higher prices.

Prices for FOB export sales are within the same boundaries as last week with light solvent neutral grades banded perhaps slightly lower at $970-$990/t, with the heavier vis grades around $995-$1020/t. Bright stock shows strength, with prices moving to reflect demand and availability for this grade, which is becoming scare for large parcels within Europe. Prices for this grade are now $1155-$1195/t.

These FOB prices refer to offers and sales where applicable, from mainstream European and North African facilities where availability of particular grades is identified.

Local European mainland prices remain stable. Group I base oils are maintaining their profile with a differential of 60-100/t over export prices in respect of the solvent neutral grades, with bright stock selling at similar levels to export.

Baltic & Black Seas
Baltic sellers remain confident that theyll get what they consider to be realistic prices for SN 500, which is in demand in locations such as West Africa. SN 150 and SN 500 are now selling between $930-$975/t with a number of traders looking to buy cargoes for Nigeria, but these cargoes also involve large quantities of SN 900 which can compete with lower quality bright stock being imported from the United States at FOB levels of around $1025-$1040/t, although one trader is reported to have bought around 7,000 tons of SN 900 to move to Apapa in Nigeria along with a 4,000 ton parcel of SN 500. The price paid for the SN 900 was said to be under $1000/t.

Black Sea trading for Turkish importers has seen cargoes of base stocks coming in from Iran, along with more usual imports from Russia and Uzbekistan. Prices are stable with SN 150 priced at around $920-$930/t FOB Black Sea ports, and SN 500 some $10-$15/t higher at $930-$945/t.

Middle East
Near Middle East base oil business has been so decimated by the Syrian situation that finished lubes are now being imported into a region with significant base oils from Mediterranean and Red Sea suppliers. The base oil scene saw regular shipments of some 6,000 tons per month entering through Lattakia, Syria for the Homs refinery under the Syrian tender which was awarded annually to various traders who had the backing of an approved physical supplier.

Middle East Gulf prices for Group I grades of base oil landed CIF have firmed again this week with demand for all types of base oils moving steadily upwards in regions such as United Arab Emirates and Oman. Prices are still two-tiered, with higher specification SN 500 material being landed into U.A.E. and Oman from suppliers in Saudi Arabia at levels around $1025-$1075. Bright stock is being sourced from U.S. and Brazil with some small avails coming out of Iran. Some European material has been offered, but was declined due to prices being too high. Receivers in U.A.E. will pay between $1230-$1265 for various quantities and qualities of this product.

Lower-quality Group I solvent neutrals are $960-$985/t basis CFR U.A.E.

Prices for SN 500 – available from Iranian companies such as Sepahon and Iranol — have been pushed higher yet again, with sellers saying its becoming popular again for the Indian market.

FOB levels have now reached $1000/t for supplies of the SN 500 grade.

Africa
East Africa imports have seen some low quality re-refined base oils being used by blenders within landlocked countries in Africa, some coming from a plant in Bahrain through traders based in U.A.E. and packaged in drums. Pricing is reportedly around $720-$760/t.

Nigerian buyers have been receiving parcels of U.S bright stock and heavy neutrals which have been more aggressively priced than comparable material from European sources, including the Baltic. There is also heavy demand for high vis SN 900 from Russian refineries. Cargoes are being negotiated from Baltic supply points for Nigeria, but no firm commitments have been put in place along with shipping fixtures. Prices for material supplied into Nigerian ports remain as previous, with the exception of European bright stock which is now priced at a premium. The likelihood is that bright stock from the U.S. or other alternative sources such as Brazil will be substituted for European produced material in the short term.

Levels for the Group I solvent neutrals delivered into Nigeria have not moved from around $1045-$1085/t, with U.S bright stock delivered at around $1165-$1200/t, all on the basis of CFR.

Group II/III
European Group II prices in Europe appear to be dividing, with U.S imports taking a stronger reign in the market in price terms, with Far East-sourced material priced slightly lower. However, these prices reflect numbers posted in Far East as far back as August, and with that market moving higher over the past few weeks, these differentials may start to disappear.

Prices are stable over the last few weeks. Light grades 100N and 220N are around $1090-$1155/t, with higher vis 500N and 600N material being offered Antwerp-Rotterdam-Amsterdam tank between $1145-$1210/t.

Group II prices in Middle East Gulf are starting to rise, but with more and more production coming back on stream and new units being commissioned, the Group II Middle East Gulf market may end in total oversupply. CIF levels are in ranges of $1165-$1180/t for the high vis imports with lower vis material quoted at $1045-$1065/t.

The European Group III market is seeing some amazing changes with suppliers and buyers saying that demand is rising and prices may harden. Suppliers are keen to hold on newly acquired market share and may prefer to leave prices alone for the moment to further establish a European base for Group III to flourish.

Prices for the two main grades within Europe are 975-995/t basis ex tank supplies either northwestern Europe or Mediterranean.

Ray Masson is director of Pumacrown Ltd., a trader and broker of petroleum products in East Grinstead, U.K. Contact him directly atpumacrown@email.com.