On the contrary, most suppliers report robust domestic orders and balanced-to-snug availability. Large-volume buyers concerns about the tight situation have lent additional support to the recent price hikes, sources explained.

The tight supply conditions on the paraffinic side may be partly attributed to a short turnaround at the Excel Paralubes base oil plant in Westlake, Louisiana. The unit can produce 22,200 barrels per day of API Group II oils – which are jointly marketed by Phillips 66 and Flint Hills Resources – and was heard to have resumed production on June 26.

The turnaround was completed earlier than expected, but both suppliers were understood to have no extra material available at the moment, and it may take about a month for them to build inventory, sources said.

Other suppliers were heard to have received spot orders to cover immediate needs and July requirements that had not been met, possibly due to the outage.

Demand has been healthy on the domestic side of the business and is expected to continue showing similar levels in July, but August is typically a month when requirements start to slow down, although at least one producer noted that August orders were looking strong.

Naphthenic suppliers also reported a thriving month of June and expected steady demand across all grades in July, with inventories mostly balanced against requirements and the late May price increase implemented without a hitch.

On the export front, there has been steady buying interest from Mexico and South America, but inquiries from Europe for July shipments have started to lose steam with the arrival of the summer holidays.

Both buyers and sellers on the U.S. Gulf Coast are also keeping a close eye on weather forecasts, as the hurricane season has started and any severe storms could cause supply disruptions. Some consumers are trying to pad inventories to prepare for unexpected shortages.

Upstream, it has been an interesting week, with many uncertainties affecting crude oil prices after the referendum vote for the United Kingdom to eventually withdraw from the European Union.

Brexit threw the global financial markets into turmoil, with crude oil also falling eight percent early in the week, but recovering on Tuesday on potential oil supply outages and crude inventory drawdowns.

A looming strike at a number of Norwegian oil and gas fields that threatens output in Western Europes biggest producer, and a significant drop in U.S. crude stockpiles pushed futures up by more than three percent on Tuesday.

West Texas Intermediate futures settled on the CME/Nymex at $47.85 per barrel on June 28, down $1.00 per bbl from the June 21 settlement of $48.85 per bbl.

Light Louisiana Sweet wholesale spot prices closed at $47.50 per bbl on June 27, compared to $50.00 per bbl on June 17, according to data from the U.S. Energy Information Administration.

Brent was trading at $48.58 per bbl on the CME on June 28, down $2.04 per bbl from $50.62 per bbl a week earlier.

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