Suppliers say that base oil prices remain firm due to generally healthy demand and limited availability, and they are making no moves to lower postings. Most sellers concur that inventories have improved, but stock levels need to be somewhat beefier ahead of the hurricane season.

Suppliers also point out that despite the recent slowdown, demand has not packed up and moved away. It has simply quietened on the back of summer holiday season. Most suppliers also suspect that buying interest will return to a hefty pace shortly into September.

With consumers anxious to see sellers reduce postings because of a build up in overall availability and lower crude oil values, there may be a stand-off forming between buyers and sellers, one source said.

There may be some price reprieves in the naphthenic arena, according to a few players. In some cases, 2000 vis pale oil was offered around $3.87/gal to $3.92/gal FOB, a lower level than seen a month ago, when it was around $4.20/gal FOB. These lower prices were not thought to be widespread – at least not yet, said one source. A few keen players also said that some of the sales control plans that had been enforced by producers for months were recently lifted, by at least a few producers, due to improved naphthenic stock positions.

Sources also said a couple of sellers have been touting surplus heavy neutrals and bright stock. The amounts of these grades currently available are not described as ample and could only satisfy a small buyers needs, said one source. The source also mentioned that offers attached to this surplus were not discounted.

U.S. base oil players may also be keeping a low profile while waiting for some stability to return to volatile global markets, following Standard & Poors lowering of the United States long-term sovereign credit rating on Friday.

There are various and conflicting opinions about whether the U.S. and global economies have made a downward turn. Some analysts (despite Standard & Poors) forecast notable improvement and believe that the United States has recovered from the recession, while other experts are less convinced.

At the close of the Tuesday, Aug. 9, NYMEX session, light sweet crude futures ended the day at $79.30 per barrel, a whopping loss of $14.49 compared to the week earlier settlement at $93.79/bbl.

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