The result of this rather stale market is that very few new pieces of business have been transacted, and even fewer enquiries are being worked. Tenders to sell or buy are attracting very little attention, with East Mediterranean suppliers perhaps needing to reissue, should offers not be received by due dates.

Behind the base oil front, crude oil appears to have stabilised at $114 to $117 per barrel, with ICE gas oil front month, now September, showing higher than last week. It reached $991 per metric ton at one point in trading on Tuesday, before closing at $987/t. This indicator has moved upwards some $30 in the last seven days, showing the strength of the product markets. Sources say this can only fuel the impetus for base oil prices to rise when the market eventually reconvenes.

Base oil prices, meanwhile, are merely marking time, with a few sellers tweaks here and there to take account of raw material costs. But with few offers and even fewer confirmed deals, business has been extremely thin.

Prices remain in the same basic ranges as last week, with some small adjustments to reflect feedstock levels. The spreads for API Group l solvent neutrals are $990 to $1025/t for the lighter grades, and $1000 to $1040 for heavier material. The only declaration of demand this week was seen in the limited enquiries for bright stock, which elevated this grade to between $1065 and $1095/t.

All the above prices refer to bulk parcels offered or sold on an FOB basis, ex mainstream supply points, within European mainland and North Africa, where avails and production allow.

European mainland local prices are still at premia to the bulk levels above, and are said to reflect the extra costs incurred such as handling, transportation and storage, but even these prices are not as highly pitched as previously.

The differential between bulk export levels and local truck delivered prices has been eroded to an all-time low, only some 65 above cargo sales prices. This narrowing has been due in no small part to the ability of buyers to shop around for alternative sources, and has resulted in blenders accepting material from Baltic and Eastern European producers which they are finding satisfactory in both price and quality.

Baltic and Black Seas
In the Baltics, a similar scene to last week is in place, with some distributors claiming stock-outs and others not willing to offer prices or enter discussions until the end of August or beginning of September. Some sellers who are also producers have declared that they will not settle for less than gas oil prices, even if the base stocks were produced some time ago when gas oil cost at least $130 less per ton.

Effectively this means that there is pressure for Baltic prices to rise. At the moment the market may not be feeling it, but sellers say future numbers will have to reflect the higher feedstock levels since FCA levels are rising within Russian refineries, affecting future base oil supplies.

Black Sea Russian and Uzbek supplies are already showing some firming, with FOB numbers suggested around $1020 to $1035/t for SN 150 and SN 500 to be loaded in the first-half September. No prompt offers were heard this week though, with sellers content to wait until Eid ends in Turkey buyers return to their desks.

Middle East
Middle East markets have been closed for much of the past week, with the weekend on Friday, the ending of Ramadan on Saturday, and the four-day Eid celebrations thereafter.

Iranian sources suggest that at least one supplier has drastically cut FOB selling prices in response to large accumulations of stock building within the country. Reports are that supply points in the southern parts of Iran are at tank tops, and U.S. dollar equivalent numbers are now $925/t for the SN 150 grade, with varying qualities of SN 500 between $905 and $920/t. Heavier SN 650 material is available at $920/t, all basis FOB sales. The problem remains that many banks will not entertain dealing with Iranian supplies due to sanctions, and vessel owners and operators are unwilling to risk stigmatization following loading at Iranian ports. Local supply between Iran and UAE continues, but on much-reduced basis.

Offers of Group ll material from Far East still pervade the Middle East Gulf, with prices now competitive with European and local Group l base oils. Levels of $1055 to $1075/t basis CIF have been reported, although buyers stated this week that these numbers may no longer be valid, given the latest crude and feedstock hikes.

Africa
There are still enquiries for all types of base oils from receivers in eastern and southern Africa. One cargo of some 3,000 tons of SN 500 accompanied by 1,000 tons of bright stock has been circulated for South Africa, with other similar quantities and grades being examined for Mombasa and Dar-es-Salaam. Base oil prices in these parts have remained relatively stable over the past few months.

Levels remain attractive to importers and are gauged to be between $1250 and $1300/t for the Group l and Group ll 150-600 vis ranges, and European-quality bright stock (where available) at up to $1400/t. These prices refer to deliveries made by truck on an ex rack basis.

West Africa has been very quiet with the effects of Ramadan and Eid being felt in Nigeria. Many other importing countries such as Senegal, Cote dIvoire and Ghana have also been slow, with demand slack and inventories at high levels. This follows on the discounting of base oils over the past three months, during which many receivers took the opportunity of replenishing stocks.

Enquiries for some mixed Group l grades for Nigeria are asking substantially higher levels, although comments received this week from more than one importer suggested that they are still looking to land material at less than $1000/t for Group l solvent neutrals and bright stock! The market has changed and such levels will no longer be feasible, suppliers countered; they put new levels some $150/t higher.

Group II-III
Group ll prices have followed Group l sentiment with no real movements over the past few days. With no source pressure from the Far East or U.S., producers, distributors and other ancillary sellers say they may take this chance to shorten inventory positions by keeping these grades competitive against Group l. That appears to be happening in the Middle East Gulf and Turkey. Prices are stable from last week at $1030 to $1055/t for the light-vis grades and heavier material around $1065 to $1130, all basis ex tank sales, mainland Europe.

Group ll cargoes are being pushed hard in the Middle East Gulf since, with India not buying currently, sellers are keen to keep moving stocks out of tank in Far East, where demand has not seen any form of real recovery. Prices are very competitive, with CIF offers for September cargoes heard this week between $1075 and $1090/t for the lighter ends, and $1090 to $1120/t for the heavier grades. The reports of material being offered into the Middle East Gulf at below $1000 (even down to $980) have not been corroborated by either buyers or sellers, and are deemed to have been invented by some hopeful purchasers.

Group lll pricing remains unaltered, with a really quiet week for deliveries of these grades. Some blenders are actually closed or on short-time for the holiday season. These sales are not expected to pick up again until September, hence prices are as last reported: 1150 to 1165/t for 4 cSt grades, and 6cSt material between 1195 and 1210, all ex tank.

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.