Posted prices for base oils in the United States were unchanged this past week as crude oil costs jumped toward $50 per barrel, then fell back to the mid-40s. Observers said crude prices may finally have peaked but warned that supply disruptions could still send them soaring again.
Prices for crude on the New York Mercantile Exchange set records 16 consecutive days until peaking last week at $49.40 per barrel. The price then fell for three straight days, closing yesterday at $45.31, according to Bloomberg news service.
According to news reports, analysts attributed the drop to better outlooks for oil production in Iraq and elsewhere. Exports of oil from southern Iraq returned to normal levels following pipeline disruptions earlier this month. In addition, the country began pumping oil through its northern pipeline for the first time since May.
Observers said market concerns also eased on statements by officials in Russia that oil production there should remain steady despite financial problems at giant Yukos. There was also hope that Venezuelan President Hugo Chavez survival of a recall election will reduce the likelihood of disruptions for South Americas largest crude exporter.
Many analysts agreed that crude prices are higher than todays supply-demand balance warrants and that prices therefore could continue falling. But they also warned that the latest trend could quickly reverse if new disruptions develop.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.