Business was generally subdued in the week leading to the Thanksgiving holiday on Nov. 28-29, but suppliers were keeping a watchful eye on inventories, as a majority of players were striving to end the year with as little product as possible due to tax concerns.

Likewise, buyers have been reluctant to purchase large quantities of base stock because of year-end inventory pressure, but in many cases, the discounts offered by suppliers had been a good incentive to secure material on the spot market.

Suppliers conceded that they had been pushing spot sales to lower stock levels, and that spot prices had moved down in recent weeks.

Discounts in the realm of 5-10 cents per gallon for API Group I grades and of 10-15 cents/gal — and up to 20 cents/gal in some cases — for Group II cuts have been mentioned, but suppliers underlined that spot sales constituted only a small portion of the domestic business.

The majority of orders are fulfilled through term contracts, and this side of the business has not seen any price fluctuations, sources emphasized, adding that a revision to posted prices was very unlikely before the end of the year.

A supplier confirmed that the paraffinic base oil market was in better shape than many had predicted, particularly as there had been widespread concern about a potentially severe oversupply situation in the fourth quarter.

On the naphthenics front, supply appeared to be fairly well-balanced against demand, which was supporting generally stable pricing.

Upstream, West Texas Intermediate (WTI) crude futures climbed on expectations that an Energy Information Administration (EIA) report released on Wednesday would show that crude stockpiles in the U.S. have dropped more than anticipated. Crude prices had slipped on Nov. 25 after several countries and Iran reached an agreement over the nations nuclear program.

WTI settled on the CME/Nymex at $93.68 per barrel on Tuesday, Nov. 26, up 34 cents from last Tuesdays settlement at $93.34/bbl.

Brent crude was trading at around $110.88 per barrel late yesterday on the CME, up $3.96 from $106.92 a week ago.

LLS (Light Louisiana Sweet) was trading at a premium to WTI of around $4/bbl on Nov. 22, compared with $2.70/bbl on Nov. 19.

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