U.S. Base Oil Price Report


Sources revealedlate yesterday that API Group II postings were about to drop for the first time this year,as Flint Hills Resources announced a decrease of 10 to 20 cents per gallon.

The long awaited price movement in the Group II category may finally be arriving, sources speculated. According to direct customers, Flint Hills Resources lowered its neutrals by 20 cents/gal on all grades except 600 N, which went down by 10 cents/gal, effective today, Nov 30. Many players anticipate that other producers will follow this price move due to building pressure from lower global pricing ideas.

Overall U.S. base oil activity remained thin, but sellers agree that customers contractual orders met expectations for November, and December volumes look promising.

Spot offers, on the other hand, were falling prey to downward pressure due to lower prices seen in Europe and Asia, sources said.

Despite the pressure on spot values, there were few completed domestic or export transactions, according to some sellers. There was an uptick, however, in import deals as a few large U.S. buyers were seen to be taking advantage of the cheaper offers stemming from Asia or Europe. A number of cargoes have recently unloaded or are expected to arrive in the U.S. within the coming weeks, say traders.

Some fresh buying interest was detected in Mexico, said a few suppliers, but the buy offers were considered too low.

Meanwhile, with December approaching, market temperament has quietened in a typical manner. Some players believe that naphthenic prices could take a tumble before the end of the year, alongside slowing activity. Other participants are not convinced that lower pale oil prices will materialize, considering the rise in crude oil values to near the $100 per barrel mark.

At the close of the Tuesday, Nov. 29, CME/Nymex session, front month light sweet crude oil futures ended the day at $99.79 per barrel, a gain of $1.78/bbl from last weeks settlement at $98.01.

Brent crude was trading at $110.95/bbl at the end of the day yesterday, up $2.26/bbl from its week-ago level at $108.69. LLS (Light Louisiana Sweet) crude was trading at a premium of about $12.25/bbl to WTI on Tuesday.

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

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