API Group I European FOB prices have been maintained since last week, with little movement in the last few days. Light solvent neutrals seem to have become more available, thus alleviating price pressure caused by increased demand of late. Numbers are still $1035-$1065/t, but higher in instances where Group II grades are sold as alternatives.

SN 500 is widely available from its usual raft of producers this week. SN 600 is also available from a couple of Mediterranean producers (although not in such large quantities) at $1035-$1065/t, some $5/t lower than it was last week.

Bright stock is also showing availability from a number of suppliers in northwestern Europe and the Mediterranean. Prices are still relatively high, and given that United States producers and Brazilian sources are not flush with quantities, demand is brisk for the available barrels. Many receivers, however, are scouring for alternative heavy vis Group I grades to substitute for mainstream BS 150. With slight buyer pressure, levels are $1215-$1230/t, some $5/t less than previously reported.

Prices above refer to Group I FOB bulk cargo sized parcels available ex producers in Europe or North Africa, where availability allows.

Local and domestic Group I supplies are widely available. A number of receivers in Antwerp-Rotterdam-Amsterdam-Germany have acknowledged purchasing Baltic material that has loaded or will load soon. The return of this option appears to have lifted the specter of prices rising further in mainland Europe. Some suppliers may trim prices to preserve market share against the rising tide of available Russian and Belarus exports reappearing in the market. However, the premium for local prices over export levels is preserved at 75-90/t, maintaining a clear differential between the two.

The Group II market has been largely uneventful. Prices have been somewhat stabilized by the apparent hiatus in the Group I market, against which Group II grades are being constantly measured. Light vis grades 100N, 150N and 220N are maintained at $1085-$1125/t and the heavier vis range is still at $1195-$1285/t ex tank Antwerp-Rotterdam-Amsterdam.

Group III grades are moving in the right direction. With new automotive specs hitting the European markets later this year, the expectation for increased use of Group III base stocks is on the up. Prices remain at 955-960/t for ex tank supplies of 4 cSt grades, and 965-975/t for 6 cSt oils.

Baltic and Black Seas

The Baltic scene is starting to make a comeback, but many sellers still cannot offer large quantities for prompt loading. There are reports of SN 150 being made available at around $1000-$1020/t basis FOB, with SN 500 comparable to mainstream material priced at around $1035-$1040/t on a similar basis. FCA levels from Russian refineries have increased by $40-$50/t for I-20A and I-40A, which are ultimately sold as SN 150 and SN 500 after some upgrading on spec for the SN 500.

SN 900 or alternative heavy vis grades in various forms are being made available on a bid basis, with the highest-spec material being sold at around $1090 basis DAF border. Lower-spec heavy vis blends are between $1070/t and around $1125/t basis FOB sales.

Black Sea trades are still dull with few delivered parcels arriving into Turkey. Bulgarian receivers have reportedly been taking quantities of Uzbek and Turkmeni grades into Burgas, and once again there are possibilities for Russian sellers trying to move large quantities from the Black Sea to the Middle East Gulf in June.

Prices for Uzbek grades I-12A through I-50A are offered at $995-$1045/t basis CIF Gebze port. Turkmeni avails of SN 180 and SN 350 are being offered at $945-$960/t basis FOB Black Sea load ports.

Middle East

Middle East Gulf regions report brisk business with a number of major receivers awaiting arrivals of Group I and Group II cargoes. Group I material ex U.S. is due to arrive for discharge in United Arab Emirates within the next few days, but these will possibly be the last available parcels of this type of material until production in the U.S. returns to normal after turnarounds. Group I neutrals are being loaded ex Red Sea for receivers in Oman, Fujairah and Sharjah.

Prices for imported Group I base stocks varies depending on source and spec, but most prime Group I neutrals are discharging between $1065/t and $1095/t CIF/CFR, with local Iranian exports moving up $10-$20/t basis FOB, meaning that re-exports in bulk ex U.A.E. are around $1030/t in respect of SN 500, with reports that all available SN 150 has remained within U.A.E. as blendstock, due to a lack of material coming from Europe, the U.S., and Brazil.

Bright stock remains a priority grade for Middle East Gulf regions, with one cargo already committed to receivers in U.A.E. Other receivers have issued enquiries for two other parcels of between 3,000-5,000 tons of bright stock, over and above quantities already contracted, but where this supply will come from is not an easy guess. Targeted prices are around $1280, but with only one offer on the table at $1318/t, buyers and sellers are not close to conclusion.

Group II demand in the Middle East Gulf is rising again, but buyers are remaining strong against the tide of $20-$40/t increases being pushed through by suppliers from Far East sources. The market would appear to be short of suppliers, considering many potential U.S. sellers are taking a back seat at the moment due to supply constraints from turnarounds and technical problems with one major cracker. However, Far East producers are taking up the slack, and appear to be going long on Group II production since their local markets are not performing as expected.

Therefore, offers moved up some $20/t this week to around $1085-$1120/t for the range of light vis grades along with offers for heavy grades remaining at $1110-$1145/t all basis CIF/CFR Middle East Gulf ports. Buying prices may be different, with receivers adamant that they will not pay more than May prices for future cargoes due to the market going long.

Africa

West African prices for Group I are held back at the moment due to wider avails coming about in mainland Europe along with the reemergence of future Baltic supplies.

A number of large cargoes are being planned by the regions usual traders. Some of which are three-port loadings, which would normally be an expensive and avoidable necessity. However, with the spread of grades from the Baltic to mainland Europe, this process is being readily adopted.

Prices for the parcels currently being delivered had been agreed on and loaded five to eight weeks ago, and prices have moved up since then. Therefore, prices are estimated on a forward basis, with offers for Group l solvent neutrals assessed at $1125-$1165/t and European mainstream bright stock around $1310/t. Other grades, such as SN 900 and other heavier Group I material will be $1185-$1275/t depending on spec and source.

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