In the meantime, prices appear to have peaked then plateaued within a defined range, which seems to be acceptable to both sides.

Crude oil has spiked to around $110 per barrel in respect of Dated Brent, but in early trading this week, levels receded to around $107 per barrel, even against the backdrop of Russian activities in Ukraine, Syrian elections forthcoming, and Egyptian sentencing of hundreds of extremists. ICE gas oil has also fallen back to around $904 per metric ton after having moved upwards some $30 in the last few days.

Group I FOB numbers are still stable, with light solvent neutrals at $1010-$1040/t and heavier SN 500 and SN 600 at $1035-$1075/t. Bright stock is still in demand and large quantities are proving to be elusive. Demand from n Middle East Gulf and West Africa export markets has pushed bright stock offers this week to $1235-$1260/t.

Most products are still tight, with some sellers advising that it may be June or even July before they have spot parcels of mixed Group I grades available for offer and sale.

The prices above refer to FOB offers and or sales ex mainstream suppliers located within mainland Europe or North Africa where avails allow.

Encouraged by the lack of Baltic avails, which can have a stabilizing effect on the prices for mainstream production, the mainland Europe domestic market has seen increases in Group I prices throughout April, with some offers $40-$60/t higher than previous numbers. Some of these increments have been given back to regular lifters in the form of temporary voluntary allowances (TVAs) and other discounts, but with alternative supplies being extremely limited, most of the buyers / blenders have accepted at least part of the increases and have passed these on to finished lubricant prices.

Local levels are now assessed at 50-70/t higher than the export levels specified above.

Source increases have helped push Group II numbers higher, with imported barrels coming into Europe now reflecting increases of $20-$30/t. The acceptance of these increments has been easier due to rising Group I prices and lack of avails. Some buyers have been tempted to look at the alternatives of Group II supplies, particularly for the light grades, which on balance can compete with Group I light solvent neutrals.

In the meantime, numbers are moving upwards within Europe, with light vis grades between $1090/t and $1125/t, and heavier vis 500N and 600N selling at $1195-$1285/t on the basis of ex tank sales Antwerp-Rotterdam-Amsterdam.

With Group III producers under pressure from higher production and feedstock costs, levels have started to rise. Some sellers have increased prices for the heavier 6 cSt grade, but mainly, most buyers are prepared to accept the $15-$20/t move due after the May Day holiday (May 1).

Levels are now 945-960/t in respect of the 4 cSt material with 6 cSt products at 960-970/t.

Baltic and Black Seas

Baltic availabilities are sporadic, with some sellers reporting availabilities and others still awaiting replenishment. Prices are perhaps a little lower than previously considered with DAF border levels around $960-$975/t, giving FOB levels around $995-$1010/t in respect of the two main grades, SN 150 and SN 500.

Sources confirmed at least one 4,000 ton parcel of SN 900 was identified last week, hinting at prices of $1045-$1050/t.

Black Sea enquiries for Uzbek material are coming in from Greece and destinations in India and Far East where some of the lighter vis Group I grades are scarce. Prices are quoted at around $1000/t for a variety of destinations around Black Sea, with more destinations between $1020-$1045/t, all delivered in flexies.

SN 180 and SN 350 ex Turkmenistan are offered at $975-$980/t basis CIF Gebze range.

Middle East

Middle East Gulf Group I supplies of SN 500 have seen prices softening, with re-exports now below $975/t. Red Sea and local production are priced at $1055-$1085/t in respect of the solvent neutrals, with bright stock, which is relatively short and in demand, landing at around $1260/t.

Group II supplies into the region are increasing, with a parcel of some 8,500 tons loading ex Korea for arrival into Middle East Gulf receivers during May. Prices for Group II imports are said to be rising in line with source increases in Far East, particularly for the light vis grades. However, buyers say they will not pay higher due to the oversupply situation forecasted for the next few months.

Prices for Group II material into Middle East Gulf regions are $1060-$1090/t for the light vis grades with heavier material 500N and 600N between $1095/t and $1135/t CIF Middle East Gulf ports. These levels are expected to rise $20-$30/t, at least in offers for supplies for May and June arrival.

Africa

West African receivers have received offers for Baltic supplies plus top-off quantities being loaded ex northwestern Europe and Atlantic Mediterranean supply sources, but the offers are in some cases being countered by up to $100/t less. This impasse is due to be extended until receivers in Nigeria realize that local market prices for both base oils and finished lubes have to increase to take account of rising raw material costs.

Offers are around $1085/t in respect of SN 500, with bright stock offered at $1375/t. Receivers in Nigeria have not accepted that source FOB levels for Group I base stocks have risen over the last two months, and some are reported as countering offers at the same prices as were paid during February.

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.