Due to dismal buying interest against fairly full tanks, suppliers agreed that it had been a struggle getting through the last several months of 2011. A sizeable seller said that it is a relief now to see that “consumers are back in the game.” Other suppliers also admitted that they are relieved to see their customer off-take has improved compared to the past quarter.

Although domestic prices appeared to have stabilized by late January, there apparently remain a few buyers seeking some level of discount, a couple of sellers noted. However, most producers are unwilling to participate in price cutting due to lofty operating costs amid improved buying and better-balanced stock positions.

Nevertheless, it was understood that one or two large buyers concluded some spot activity at discounted prices to the tune of an estimated 40 to 50 cents/gal below regular ongoing business. These trades were heard to have involved both domestic and imported base oils. Whether these good deals could be repeated in todays market was unknown, while most U.S. sellers say they have since raised price points from November-December levels.

One potential spot buyer said that it was evident that some lighter vis grades were adequately available and at discounted prices, although sellers would disagree. Meanwhile, it was heard that API Group II grades are generally balanced-to-tight, particularly concerning mid and heavy vis cuts. Group III grades are basically tight, although contract customers are receiving their volumes without interruption. Whether there is length in the Group I base oils category is more difficult to identify as it depends on supplier, location and point of delivery, according to sources.

Direct customers report that Motiva continues with its planned turnaround, which began several weeks ago at its Group II site in Port Arthur, Texas. A mid-February startup is expected, although the exact date is unconfirmed. Sources also said that a planned downtime will soon commence at the Group II Excel Paralubes site in Westlake, La.

Calumet will take its Group I/II Shreveport, La. plant down for a 15-day maintenance program on its hydrotreater on Feb. 10. There are rumblings that another sizeable Group II North American facility may also be heading into a scheduled turnaround in the coming month, but details remain vague.

Calumets Princeton, La., naphthenic production facility is also slated for a two-phase shutdown. The crude unit is expected to be taken offline in early March, followed by hydrotreater maintenance beginning on April 7. Cross Oil also is preparing for scheduled maintenance at its Smackover, Ark., refinery in March. The exact dates have not yet been announced.

In all cases of planned outages, producers have already or will prepare inventory positions in advance to assure customers requirements will not be jeopardized.

At the close of the Tuesday, Jan. 31, CME/Nymex session, front month light sweet crude oil futures ended the day at $98.48 per barrel, shedding 47 cents/bbl from last weeks settlement at $98.95.

Brent crude was trading at $110.87/bbl at the end of the day yesterday, down 63 cents/bbl from its week-ago level at $110.24. LLS (Light Louisiana Sweet) crude was trading at a premium of about $10.3/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.