The temperament of the U.S. base oils market remains one of hesitance. Is the approaching presidential election sidelining players? Has unsteadiness of the global financial situation limited activity here at home? These are just a few suggestions made by players to explain the slowing now seen in the marketplace.
To a number of participants, it is hardly a guess that the sluggish economic scene, particularly in Europe, has curbed a good portion of the export activity that would otherwise be taking place. But with the apparent slowdown seen in a number of countries in Europe and Asia, offshore shipments ex-U.S. East, Gulf and West coasts have been suspended in recent months.
As a result, this has helped pad stock positions in North America so that suppliers now have ample availability to offer any willing buyers in the United States, or even elsewhere.
A few sources indicated that a number of large spot parcels have found their way into the Mexican market and most likely even deeper into South America. This has alleviated some build-up of product along the Gulf Coast, said insiders, but they admit there remains a plethora of availability within the API Group I and II categories and possibly even surplus of some Group III premium grades.
Meanwhile, all eyes were on the stock indices and futures trading as everything went south on Tuesday. The Dow Jones Average shed more than 200 points, while oil futures slipped to their lowest level since June. Whether sinking commodities will correct or rally remains to be seen, but analysts blamed the extreme losses on poor corporate earnings and fresh global financial worries.
At the close of the Tuesday, Oct. 23, CME/Nymex session, front month light sweet crude oil futures ended the day at $86.67/barrel, shedding $5.42/bbl from last weeks settlement at $92.09.
Brent Crude was trading at $108.32/bbl at the end of the day yesterday, a loss of $5.42/bbl from its week-ago level of $113.74. LLS (Light Louisiana Sweet) crude was trading at a premium of about $21.75/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.