Base Oil Price Report


The market for bright stock in the United States remains exceptionally tight – in part, reportedly, because of a drop off in imports from Brazil. There does, however, appear to be a steady stream of Group I imports from Russia.

Buyers and sellers said bright stock availability has not loosened since the end of last year, even though the lubricant market remains in its winter lull. One source suggested that U.S. production dipped last year because refiners – attempting to take advantage of healthy fuel margins – switched to crude feeds that had high yields for fuel but less for bright stock.

Several others agreed that the market is missing Brazilian imports. National oil company Petrobras has historically been a fairly steady exporter to the United States, but that traffic was disrupted last year in the wake of operational problems and a maintenance turnaroundby the base oil plant at the companys Duque de Caxias Refinery in Rio de Janeiro. Petrobras said recently that those issues have been resolved, but bright stock exports have not returned to past levels.

The U.S. is once again receiving regular shipments of base oil from Russia. Such traffic reportedly ceased in mid-2004 because the spread between prices in Russia and the United States had narrowed too much to pay for transportation costs. Observers said shipments began again last autumn – after steep hikes in U.S. prices – and that they havebeen arrivingsteadily so far this year at ports in Savannah, Ga., and in Florida.

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 at $47.30 per barrel, $1.86 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.

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