U.S. Base Oil Price Report


Following Hurricane Isaac, which hit the New Orleans area on Aug. 29, it was understood that most refineries in the Gulf Coast region (Texas/Louisiana/Mississippi) that had powered down in preparation for the storm were now up and running.

Market observers surmised that there was no damage or unexpected downtime at any base oil facilities in the area.

In terms of activity this past week, sources said that there continued to be a slight uptick in U.S. base oil demand, and that spot prices also gained a modicum of upward momentum. Several buyers indicated that spot offers had firmed another 5 to 10 cents per gallon over the past several days of trade.

A handful of players noted that despite improved demand, overall activity was still somewhat quiet in the marketplace this week and attributed this past holiday weekend as the culprit. However, players highly anticipate that a surge in orders will be noticeable in the coming weeks, just in time for the annual fall buying season.

There was again some chatter among some participants about the possibility of a posted price move, but until demand improves significantly, it was doubtful that base oil producers may attempt to boost postings. These speculations about higher prices were based on upstream fundamentals and the fact that operating costs have steadily moved up since early August.

Crude values have ticked higher the past month, and though almost hitting $100 per barrel, have fallen back to the $96/bbl level. Industry experts and analysts still believe that oil futures are destined to move to the $100/bbl and beyond, but agree that most recently prices have become volatile.

At the close of the Tuesday, Sept. 4, CME/Nymex session, front month light sweet crude oil futures ended the day at $95.30/barrel, slipping $1.03/bbl from last weeks settlement at $96.33.

Brent Crude was trading at $114.41/bbl at the end of the day yesterday, up by $2.04/bbl from its week-ago level of $112. 37. LLS (Light Louisiana Sweet) crude was trading at a premium of about $17.70/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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