U.S. base oil exports into Mexico are up, market sources say, due apparently to operational problems at that countrys lone base oil plant. Otherwise the U.S. market seems generally quiet, although producersfaced another spike in crude oil costs.
Market observers say Mexican base oil buyers have been looking for more supply outside the country the past few weeks. The need reportedly stems from problems at Petrleos Mexicanos base oil plant in Salamanca. Sources say the plant underwent a scheduled maintenance turnaround approximately one month ago. Operations have since resumed but output is significantly below normal levels. Observers say Pemex hopes to have the problems fixed sometime next month. Pemex officials could not be reached for comment.
U.S. suppliers say there has been a noticeable increase in inquiries from Mexican blenders looking for alternate sources of supply. While buyers remain choosey about prices, purchases are also up.
Its not anything dramatic, but I think [imports from the United States] are back up to where they were about two years ago, one source said, noting that the Mexican economy has declined since 2002. Once the situation returns to normal, though, you have to expect that those buyers will once again go to whoever has the lowest price.
Posted prices in the United States were unchanged this week, but crude oil costs jumped upward on speculation that a cold winter will tax heating oil supplies. According to Reuters, weather forecasters have revised previous predictions to call for cooler-than-average temperatures this winter in the Northeastern United States, which is home to 80 percent of the nations heating oil customers. Energy traders are reportedly concerned that heating oil inventories are too low.
The price of crude on the New York Mercantile Exchange climbed back above $50 per barrel yesterday, before closing at $48.84. The closing price was $2.84 higher than a week earlier. Crude prices had eased to the mid-$40s after topping $55 per barrel in October.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.