Sources, however, are reporting that this demand has been falsely created due to the market bottoming out in February, causing many buyers to take advantage of low numbers. They say that further activity may be curtailed by the large inventory replacements which have already been booked for March and April supply.

Dated Brent prices have hovered around $55 per barrel and West Texas Intermediate is at $48 per barrel. ICE gas oil levels are around $523 per metric ton.

With a static crude and feedstock scenario and demand perhaps subdued due to forward purchases, base oil prices may not be ready to move further ahead.

European API Group I prices for the range of light neutrals are reported higher at $610-$630/t, although these new levels may be the current zenith of activity. Heavier neutrals moved to $640-$665/t.

Bright stock in Europe has seen new arbitrages opening, with cargoes being loaded for the Middle East Gulf, India and in one case, the Far East. Prices being discussed for this grade have moved into a higher range: $785-$840/t.

Local European levels were perhaps due to be revised upward from April 1, but many players are forecasting that prices may be maintained due to decreasing demand. The differential between export and domestic prices has narrowed, with the premium for local sales falling to 25-40/t.

A number of Group II importers have pushed prices higher in response to increases advised from source producers. Light vis products have moved upward by $25-$30/t or euro equivalent, to $635-$660/t. Higher viscosity grades have been hoisted even further, with some suppliers now asking for $695-$745/t. Buyers are questioning these increases and have expressed concern in light of raw material costs not moving higher.

Some are calling for prices to be revised downward due to knee-jerk reactions from producers after the spike in crude and feedstock levels, which may have gone into reversal.

Group III prices are maintained at current levels, with no reports of any shortages and confirmation that suppliers will not seek to increase prices from April 1. Levels for 4 cSt and 6 cSt grades, mostly used in European markets, are 870-910/t.

A few smaller cargoes are reportedly being loaded ex Baltic for Northwest Europe markets in Antwerp-Rotterdam-Amsterdam, with the market reporting that material is still short in all the Baltic ports, perhaps with the exception of Svetly, Russia, where a major producer continues to show avails of SN 150 and SN 500. Both grades prices appear to have moved slightly upward, to $600-$655/t.

There are no intimations of any further parcels to be loaded for West Africa, perhaps due to lack of prompt avails from distributors and resellers in the region.

SN 900 for April loading is confirmed at $690/t basis FCA, but only for relatively small parcels of 2,000-3,000 tons.

Baltic and Black Sea

Black Sea activity has blossomed, with a number of large and smaller cargoes being loaded out of the Kavkaz region, with one notable parcel of 15,000 tons of two grades being moved to the United Arab Emirates. Other information has revealed cargoes of 5,000-7,000 tons being worked for Middle East Gulf, with another significant parcel of 5,000-8,000 tons earmarked for the west coast of India. These movements may be a result of the river system becoming available, but also some of these supplies may be diverted from the Baltic.

Prices for the latest loadings may have been agreed on some time back according to sources, with current levels in offers at $620-$645/t, basis STS Kavkaz/Azov.

Further Mediterranean avails are being sought for import into Turkey with 5,000 tons being fixed ex Spain and Italy for import into Gebze.

Middle East Gulf

Red Sea markets report a number of parcels being loaded ex Yanbu and Jeddah en route for Oman and U.A.E. Prices for these supplies have escalated over the past few weeks. Group I neutrals are $655-$685/t basis CIF, with bright stock moving to $875-$900/t.

Middle East Gulf supplies of Group I base oils list imports of material from the U.S. Gulf Coast, along with avails of Iranian-produced SN 500. The latter is being imported into U.A.E. and in some cases the Black Sea, and re-exported to locations such as the west coast of India and Malaysia and Myanmar. Black Sea movements make up most material going into this region, with quantities of SN 500 and SN900 being the prime grades required.

Prices are confused with historical levels being reported in conjunction with current levels which are determined as much higher, and receivers in this region are declining offers for further material. Certain receivers are calling for prices to be lowered in offers, to bring import offers into line with current cargo arrivals, but traders are declaring this to be impossible, with FOB levels having increased substantially over the past four weeks.

Group II prices continue to rise with another $10-$20/t being added to offers this week. These prices are a result of source increments from producers in the Far East and U.S., where material appears to be moving shorter, particularly for heavier vis products.

Offers this week in respect of light vis grades 100N and 220N have moved to $665-$680/t, along with heavier vis 500N and 600N between $710/t and $745/t, all basis CFR/CIF Middle East Gulf ports.

Africa

West African receivers are looking for the raft of purchases made during February, at the bottom of the market, to arrive into the various ports accepting imports of base oils. Nigerian cargoes are comprised of two large parcels ex U.S. Gulf Coast, one of 9,000-10,000 tons of mixed grades of Group I, and another of 6,000-8,000 tons of both Group I heavy neutrals and Group II light vis grades, along with quantities of bright stock in both parcels.

Prices are expected to be keen for these parcels, which were agreed on some 4-6 weeks ago, and which cannot be replicated at this time. Levels quoted by receivers are $688/t in respect of SN 500, and $828/t for bright stock.

New offers for material arriving in May have been suggested at $60-$100/t higher, although stock and inventories in West Africa will possibly now be running at a high level, avoiding the possibility that receivers are forced into accepting higher prices.

Offers for supplies of SN 900 have been verified at $827/t CIF/CFR Apapa.

Ray Masson is director of Pumacrown Ltd., a trader and broker of petroleum products in London, U.K. Contact him directly atpumacrown@email.com.