Crude prices have moved back up again this week. Dated Brent has bounced back to around $109 per barrel, although WTI lags at $86/bbl. With Dated Brent showing positive moves, and with ICE gas oil back at $923 per metric ton, up some $35/t from last week, some base oil producers even hint of increases should these indicators move further upwards.

In a number of instances one or more Mediterranean suppliers have indicated that they could be flexible when looking at end August availabilities. These gestures, however, have been small by way of reducing prices. In some case $5 to $10/t has been negotiated off of material to be moved out of tank before month end.

European levels for API Group l material remain unaltered between $1410 and $1430/t for light solvent neutrals, SN 70 through to SN 150. Heavier viscosity grades from SN 300 to SN 600 are being offered at $1415 and $1455/t, and bright stock is still showing strength at $1585 to $1650/t. All these offered prices refer to FOB sales of mainstream grades, ex mainland European and North African supply points.

One of the main factors in buyers requesting lower prices has been the saga of Russian Baltic and Black Sea prices. These numbers had dramatically fallen from the peaks seen some six to eight weeks ago, but now appear to have bottomed out, and in some cases have regained some lost ground.

Baltic supplies of the two main grades, SN 150 and SN 500, are expected to yield around $1285 to $1320/t FOB for large parcels. Large quantities of material have exited the Baltic during August with traders taking advantage of the lower numbers. One cargo is reported loading around the end of August with a total of 11,000 tons of mixed grades. Another 6,000 tons will load from Liepaja, and a further 5,000 tons will be taken from Svetly port. The destination for this cargo will be West Africa, specifically Apapa port, in Nigeria.

In the Black Sea region there have been few cargoes reported sold from Russian or Ukrainian ports. Some 3,000 tons of SN 150 was reported bought by Turkish traders, who have been few and far between, perhaps due to Ramadan and summer holidays. One unconfirmed cargo of some 4,000 tons was heard destined for Nigeria, loading out of a Black Sea Ukrainian port. Delivered prices in the Black Sea regions are generally below $1300/t. Some poorer quality light solvent neutral is being offered around $1245/t, but perhaps not for lubricant blending purposes.

Offers around $1320 to $1340/t have been made by mainstream Mediterranean suppliers or by traders using Mediterranean supply points, but buyers are prepared to wait.

Iranian material continues to flow out of the Middle East Gulf area despite the problems associated with moving cargoes from Iran, which have prevented the sale of many goods from this region. Some material is made available by UAE traders, who are re-exporting SN 500 in bulk and in flexies to Far East receivers. The traditional Indian market for these grades is poor at the moment. Products have been offered delivered into the west coast of India from UAE at $1235/t delivered, but with no takers at present.

Saudi Arabian business has all but ceased during Ramadan, with business only getting back to normal at the end of the lunar cycle in September. Prices remain as last reported.

West Africa is targeted by a number of traders as one of the few areas where European or Russian material can be sold. Interest is vibrant in obtaining Russian grades for export into West Africa. Receivers must either pay higher prices for higher quality and approved Group l grades or accept slightly lower parameters and use the Russian material instead.

A two tier market is evolving in West Africa, and in Nigeria in particular, with the lower priced Russian cargoes forming the base, with the higher priced mainstream material holding the premium slot. Prices for the Baltic supplies will be $1445 to $1485/t CFR for Group l solvent neutrals, with the heavier SN 900 grade around $100/t higher.

No bright stock is available in tandem with Baltic supplies, unless loaded at a main European source port en route, and this is highly improbable. This can be a problem for some receivers in West Africa who are dependent on approved bright stock for blending lubricants such as marine cylinder oils. Therefore there is room in this region for supplies of premium material from European producers, whatever the cost.

The price tier for European mainstream supplies will be $1565 to $1600/t CFR for SN 150 and SN 500, with bright stock at $1785 to $1825/t, same basis. One problem at the moment is that receivers are not acknowledging a two tier pricing system, but are looking for premium material at Baltic prices.

Group II/II+ prices in Europe remain buoyant, and the differential between Group I and Group II has widened a little over the past few weeks. However, prices are varied, with some sales at levels below Group l prices, while other offers and completed sales are at large premiums to Group l numbers. Levels are $1495 to $1565/t for light vis material, and higher vis grades and Group II+ are $1555 to $1700/t.

Demand for Group III is growing at a phenomenal rate. Relief from new supplies from Middle East Gulf sources, while it may create a temporary surplus, may only play a stop-gap role in plugging the holes in the market until further supplies arrive from planned plants in China and Russia.

Group III prices in Europe are rising again for some players, while TVAs or discounts are being offered to others. Prices are in wide bands, with increases at the top of the ranges, as follows: 1375 to 1430/t for 4 cSt material, and 1385 to 1460/t for 6 cSt.

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.