Pricing is relatively stable, apart from a degree of uncertainty in API Group II markets in the wake of the U.S. Gulf Coast storms.
With the U.S. governments continuous threats to Iran, and Far East demand picking up, crude oil levels have moved up slightly. Dated deliveries of Brent crude posted at $57.55 per barrel late Tuesday for December front month settlement. West Texas Intermediate crude for November front month is around $51.50 per bbl. ICE LS Gas Oil has trended higher to around $538 per metric ton for November front month settlement.
Europe
API Group I European FOB export prices are maintained from last week. Buyers suggest that availabilities are being extended, with more material being used for producers prompt spot sales.
Light solvent neutrals remain priced at $695/t-$725/t, with the heavier SN500/600 grades between $765/t and $790/t. Bright stock remains in positive demand, but with fewer enquiries for large parcels heard this week, sellers may start to offer discounts. Levels remain between $835/t and $865/t on an FOB basis.
The prices above refer to large, cargo-sized parcels of Group I base oils supplied or offered FOB ex mainland European supply points.
Sales of Group I base stocks throughout Europe remain healthy, with reports of some large blenders looking to take larger-than-normal deliveries, perhaps anticipating that feedstock rises may soon start to affect ex tank and delivered quantities. However, FCA prices remain unaltered with few rumblings of any imminent price changes.
Demand for finished lubricants is forecast to recede over the next few months, possibly not returning until early next year. This market downturn could have a profound effect on base oil sales during a time when sellers are usually keen to move inventory towards the year-end.
Domestic FCA prices are 55/t-75/t higher than spot export levels.
There have been no signs that European buyers of Group II have been inconvenienced to any great extent by events in the U.S. Gulf Coast, from where a great deal of their imports are sourced. The source increases applied by U.S. producers do not seem to have made their way to Europes side of the pond.
Levels for the range of light vis grades are maintained at $660/t-$685/t, with 500 neutral and 600N continuing between $775/t and $815/t landed CIF in bulk cargoes into Antwerp-Rotterdam-Amsterdam. FCA prices are assessed at 755/t-790/t in respect of the range of light vis base oils, with the higher vis grades at 855/t-890/t.
Prices appear to have returned to a stable range for both 4 centiStoke and 6 cSt grades, now in a band between $775/t and $810/t CIF northwestern Europe. Local euro sales for both grades are now 685/t-705/t FCA northwestern Europe. Four centiStoke and 6 cSt grades with a full gamut of approvals are being sold on FCA basis Antwerp-Rotterdam-Amsterdam at 780/t-815/t, with 8 cSt material at 755/t-775/t. These prices refer to local truck pick-up or delivered quantities of Group III base stocks and do not include deliveries to majors and distributors in large bulk cargoes, where prices may be $75/t-$100/t lower.
Baltic and Black Sea
Baltic reports are that a couple of medium-sized cargoes are fixed into Antwerp-Rotterdam-Amsterdam and the east coast of the United Kingdom, with further enquiries showing a variety of movements. One of which has been a fixture for some 4,000 tons of base oils moving from the Baltic to receivers on Turkeys Black Sea coast. This rather anomalous movement is perhaps taking freight advantage of a vessel which requires to be repositioned around Marmara for a future voyage.
Russian export barrels on an FOB basis remain $695/t-$725/t in respect of SN150, along with SN500 between $765/t and $780/t. Supplies of SN900 in bulk are available at $865/t-$880/t, with bright stock from southern Baltic sources – and also from some Russian producers – at $895/t-$945/t.
Russian exports of SN500 are assessed at $785/t-$805/t CIF Turkish or Bulgarian ports. With another large enquiry unfolding from a Kavkaz STS loading for the west coast of India, there appear to be almost two tiers of pricing within the Black Sea, with the large cargo FOB levels deemed $60/t-$75/t lower than the CIF numbers for the same products.
Mediterranean cargoes are fewer this week, with only one main Greek supply into Derince, Turkey. However, there are various intra-Black Sea parcels around, with material going from Alaina to Derince in a bridging operation, and also smaller quantities going into Varna from Kavkaz and also from Aliaga.
Substantial quantities of base oils are also moving from Antwerp-Rotterdam-Amsterdam into the Turkish ports of Gebze and Gemlik. Prices are still $750/t-$775/t in respect of SN150, with SN600 at $795/t-$825/t CIF. Bulk parcels of 4 centiStoke and 6 cSt ex Cartagena, Spain, are maintained by local sources in Marmara at $785/t-$800/t delivered CIF Gebze, Turkey, and Aliaga.
There are also reports of Group II base stocks being delivered ex Antwerp-Rotterdam-Amsterdam into Gebze, but with this being inter-affiliate or inter-distributor trade, prices remain undisclosed.
Middle East Gulf
As mentioned last week, another large milk-run cargo has been assembled by Red Sea suppliers going into Oman, United Arab Emirates, and Jordan. The latter destination confirms suggestions that this supplier had been holding this business for Aqaba.
Further Iranian exports are reportedly being assembled in Bandar Bushehr for receivers in the west coast of India. Meanwhile, a return cargo for Sharjah is being explored at almost at the same time and from the same disport. Some suggest that the cargo may not be Group I material, although it would be strange to see Group II on that route.
FOB levels are maintained at the new highs, with SN500+ around $755/t-$765/t, basis FOB Bandar Bushehr.
Group III exports from Al Ruwais declared fixed, and those under enquiry total some 40,000 tons. There are also up to 10,000-15,000 additional tons of Group III material out of Sitra.
The 4 centiStoke and 6 cSt grades loading out of Al Ruwais are priced at $675/t-$695/t FOB, based on CIF/CFR price netbacks.
Neste grades ex Sitra may achieve slightly higher levels due to holding a slate of original equipment manufacturers approvals, and are assessed at around $725/t in respect of 4 centiStoke and 6 cSt material, with 8 cSt material at around $715/t-$725/t. These notional FOB levels refer to CIF material in large cargoes and parcels sold to major buyers or appointed distributors.
Prices in respect of Group II imported base stocks into receivers in U.A.E., Qatar and Bahrain are assessed at $640/t-$655/t in respect of the light vis cuts, with 500N moving lower again, but by around $5/t-$10/t, for levels around $835/t-$860/t CIF Middle East Gulf ports.
Local U.A.E. avails of Group II material imported from the Far East and U.S. sources are available out of storage on an FCA or truck-delivered basis. Levels are $785/t-$845/t in respect of the light vis grades 100N/150N and 220N, with 500N/600N between $855/t and $925/t delivered Middle East Gulf locations. Prices will vary based on distances and quantities.
Africa
Turkish suppliers in Izmit are reportedly moving material into Morocco, with another parcel loading out of southern Spain for Algeria and another couple of parcels reported loading out of Indonesia for Egypt.
East African buyers will be receiving a large slug of material loading out of the Mediterranean and calling at a Saudi Arabian port en route for Kenya. Both African shipping agents have also confirmed another cargo loading ex Antwerp-Rotterdam-Amsterdam and the U.K., with around 11,000 tons of cargo slated for discharge into Durban during late November.
Traders supplying receivers in Guinea and Cote dIvoire have negotiated a cargo of around 8,000 tons to load out of Livorno, Italy. This slug of base oils is markedly larger than usual, and will not call at Nigerian ports on this occasion.
Offered prices for Russian export barrels into Nigeria remain unchanged, with CIF/CFR levels confirmed at $855/t-$870/t in respect of quantities of SN150, with SN500 at $895/t. Russian SN900 in bulk is $985/t-$995/t, with bright stock between $1025/t and $1055/t.
All prices for Nigeria are offers heard this week for cargoes of around 6,000 tons in size, with the proviso that larger cargoes (up to 15,000 tons) will sometimes enjoy lower freight rates, which will bring CIF/CFR delivered levels down by as much as $15/t-$25/t. These prices are all in respect of Group I base oils delivered CIF/CFR Apapa, Lagos or Port Harcourt.
Ray Masson is director of Pumacrown Ltd., a trader and broker of petroleum products in London, U.K. Contact him directly atpumacrown@email.com.