Although the U.S. base oils market maintained a generally quiet pace at the onset of the New Year celebration, a few suppliers said there was an uptick in demand the latter part of last week for an array of paraffinic neutrals.
Apart from this slight build in customers orders, most sources did not expect activity to resume to full speed until late January to mid-February when the usual seasonal spring buying gets underway.
Meanwhile, crude oil values continue to stun observers. Late last week, numbers climbed back over $97 per barrel in futures trading. However on Monday, they dropped back to around the $95 to $96 per barrel level on a stronger dollar, analysts said.
Energy traders pointed out that oil prices look set to end 2007 with the biggest gain this decade, climbing nearly 60 percent since the start of the year. But the ascent has been anything but steady.
As the year comes to an end, crude is trading around $96 per barrel. The year-over-year price gain marks crude’s biggest price jump since 1999, when prices doubled from $10 to $20/bbl.
Several industry market watchers believe that crude might run-up to around $110 to $125/bbl in the coming months. However, that depends on the outlook for the U.S. economic situation, and if it worsens, oil prices could then tumble back into the $80s, they said.
At the close of the Monday, Dec. 31, NYMEX session, light sweet crude ended at $96 per barrel, a gain of $1.87/bbl over the $94.13 settlement reported a week earlier. Markets were closed yesterday for the New Year holiday.
Posted paraffinic prices continue unchanged this week.
Carolyn L. Green, based in Houston, can be reached directly at carolynlgreen@gmail.com.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.