Crude oil prices have remained flat over the past week, with few traders around. Trading was thin after the market opened Tuesday, and dated deliveries of Brent crude dipped to $55.50 per barrel in March front month trade, virtually static against last week’s quotation. West Texas Intermediate crude posted at $52.40/bbl for February settlement, so the crack has widened to $3. ICE LS Gas Oil has also declined to $490/t for January front month.

Prices for Group I oils appear to have risen around $25/t, to $545/t-$560/t for light solvent neutrals, $590/t-$610/t for SN500 and SN 600 and $820/t-$845/t for bright stock. As mentioned, these are early days to establish exact levels, and the picture should clear by next week.

Prices above refer to large parcels of Group I base oils supplied or offered FOB ex-mainland European supply points.

Prices for sales within Europe are not at all clear yet. Many lubricant blenders are commenting, however, that they are in no rush to replenish stocks during January and may risk further increases by waiting until February levels are announced. Many expect local prices will follow export prices upwards, with the real question being the size of increase.

With almost all Group II producers in the United States announcing markups for that market, and considering the direction of Group I prices in Europe, it may be only be a matter of time before Group IIs rise in Europe. Some buyers are already contemplating hikes of $25/t (approximately 20/t) or more, but most recognize that posted prices increases in the U.S. have been closer to $60/t.

Current price levels are up slightly, with fully approved light grades now at $590/t-$625/t and 500N and 600N at $745/t-$800/t, CIF main ports Europe. Ex-tank prices may be around $45/t-$60/t (40/t-55) higher.

Sources say some Group III suppliershave increased prices on offers for contract deliveries during the first quarter. This news is not confirmed, but input from other sources is consistent with this sentiment, suggesting that sellers of oils that lack a full slate of approvals are contending that the recent run-up in crude makes it untenable to further reduce their own prices. Suppliers state that no actions were taken this week, and there may be none until later this month. The quote for this week therefore remains around $660/t, FCA Northwestern Europe for partially approved 4 centiStoke and 6 cSt.

Prices for fully approved oils FCA Antwerp-Rotterdam-Amsterdam are also unchanged at 705/t-735/t for 4 cSt and 6 cSt grades and 670/t for 8 cSt. Further input is required to confirm these levels. CIF levels for large cargoes of Group III base oil will still be assessed $25/t-$50/t lower than the equivalent dollar prices for FCA sales.

Baltic and Black Seas

There literally was no news from the Baltic, and with the Orthodox Christmas celebrations on Jan. 7, trade may be quiet until after then. Antwerp-Rotterdam-Amsterdam shipments to contracted buyers continue, and shipping reports indicate about three parcels have been dispatched from Liepaja, Riga and Svetle. One seller said they would not offer for a large parcel until early next week after judging the extent of price movements by mainland suppliers and the new ex-gate Russian refinery prices.

FOB prices for Russian SN150, SN500 and SN900 are unchanged this week, though they could rise significantly. Current levels are $495/t-$520/t, $525/t-$545/t and $595/t-$620/t for SN150, SN500 and SN900, respectively.

Black Sea trade was likewise thin the past few days, with some receivers still not returning to their offices after the New Year’s break. A number of cargoes are due to arrive into Turkey this week and next, but these reflect deals done before Christmas and are not based on prices that will form the basis of offers now being presented to buyers. The January enquiries for Mediterranean sourced Group I base oils for Derince are still being negotiated. Some have been covered and have been fixed clean for the second half January discharge.

Too little information is available on prices, but offers heard yesterday from one Mediterranean supplier suggest the following levels may apply: $565/t-$580/t for SN150, $625/t-$645/t for SN500 and SN600, and $625/t-$645/t for bright stock. Bright stock in combination with solvent neutrals out of Spanish and Italian suppliers will be around $920/t, CIF Turkish ports.

Middle East Gulf

Another enquiry has been issued for a delivery of Group I solvent neutrals and bright stock to discharge into Aqaba, Jordan. Whether this involves the same receivers as in the past is not clear, but offers from United Arab Emirates, Mediterranean and Red Sea sources are expected to participate in this tender.

Middle East Gulf deals reflect Iranian base oils being sold out of Bandar-e Emam Khomeyni and Bandar Bushehr but delivered into the West Coast of India on a CFR basis. Producers are very keen these days to avoid bringing in traders, because of the chance of margins being squeezed and making deals uncompetitive.

Prices are thought to have risen again this week, with FOB levels for the superior spec SN500 now up to around $630/t-$645/t. Offers for imported and re-exported Iranian SN500 ex-U.A.E. are also expected to rise to $635 FCA, or $645 FOB, but for oils with slightly lower viscosity index.

There are shipping enquiries in the market for cargoes from Brazil and the U.S., but no traders are admitting to being involved with these transactions, implying that they may be the subject of local trade, based in U.A.E. The original offers have been withdrawn and new offers may be forthcoming this week, reflecting levels which will probably be higher. Red Sea material is now expected to be delivered for new supply rounds at $625-4640/t for SN150, $695/t-$710/t for SN500 and $945/t-$960/t for bright stock.

A series of parcels of Group III oils ex-Al Ruwais, U.A.E., was announced from sellers, and interest the market was curious to see if prices had risen. Prices in this column are being maintained pending further information – so 4 cSt and 6 cSt grades are quoted at around $545/t and 8 cSt material at $495/t, FOB.

Group II news is that a feeder cargo of material ex northwestern Europe has discharged into U.A.E. and will replenish stock for onward sales in trucks and totes to receivers in Middle East Gulf. With source increases being announced by all but one major supplier of Group II grades, prices are ready to make the upward move. Far East suppliers are also quoting higher levels in offers which were made prior to Christmas. One supplier has withdrawn an offer on the basis of re-offering next week at a higher level. Numbers could now be based around the following levels, although clarification will be gleaned later this week as to exact pricing. Levels are assessed between $535/t-$555/t for the range of light vis grades with 500N and 600N between $690/t-$725/t CIF Middle East Gulf.

Intra-Mediterranean traffic has cast up a couple cargoes being loaded from Livorno, Italy, for Morocco and Tunisia, but it is not yet clear if these have been fixed or remain at enquiry stage. Supplies are also being evaluated from Spanish sellers. In addition to the now normal trades into North Africa, a few intra-company shipments are being loaded out of main refinery locations and transported into satellite distribution points with proximity to local blending plants.

Africa

There were few Nigerian buyers or receivers around this week, as many of those based in Lagos travelled for the holidays. Landed cargoes were priced at around $625/t for SN150, SN500 at between $675/t-$698/t, and bright stock at $915/t-$930/t. New offers are expected to contain first pass numbers around $40/t higher, although negotiation may bring these increases down to around $25/t for final settlement.

Prices for Baltic cargoes will certainly now be raised, and this column estimates them at $685/t for SN150, $715/t for SN500 with SN900 at around $865/t, CFR/CIF Apapa port, Lagos, Nigeria. These are indication levels only, do not constitute an offer to any party, and are for cargoes of at least 6,000 tons.

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