Thats the first time Ive ever seen that, said one marketer, who added that he has been in the industry for a few decades. The domestic prices are as bad as I have ever seen, relative to postings, and the export prices are as good as I have seen. Its really remarkable.

Industry observers said base oils are leaving the United States for Mexico, India and the Far East. In many cases, they said, the destinations have traditionally been supplied by European refiners. Sources speculated that the cause may be that Europe, which typically has a significant oversupply of base oil, is closer than usual to balance. Indeed, European supply was pinched last summer by shutdowns and operational problems at several plants, but U.S. suppliers expressed surprise that the market across the pond has not yet returned to normal.

Meanwhile, the market in the United States appears more flush than it has been for some time. Buyers and sellers said there is significant volume available on the spot market, though more for some grades than for others.

Maybe its just simply the fact that we finally have the whole supply slate up and running, one buyer said, referring to the series of shutdowns and operational problems that plagued the market in 2003. Now that supply isnt constrained, were seeing that domestic demand is really pretty light.

Which makes those selling overseas especially grateful for that business.

Posted prices for paraffinic base oils in the United States were unchanged again this week. The price of crude oil on the New York Mercantile Exchange closed yesterday at $34.77 per barrel, 33 cents higher than a week earlier.

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