FHR previously raised its Group II base oils by 30 cents/gal across the board on June 30. Since that move, a plethora of price hikes issued by other Group I, II and III producers have been put into action, with some postings adjusted upward by as much as 55 cents/gal.

Apart from this weeks limited price activity, the overall pace of the market was mild in comparison to weeks gone by. The supply scenario remains balanced-to-tight, while demand is still deemed very healthy.

Suppliers indicated that customers requirements have not really slowed yet this summer, despite the fact that they usually do by late July.

This summers ferocious buying pattern has been attributed to the ever-rising prices along with a growing shortage of base oils in the past few months.

Regarding market prices, some buyers are now eyeing the possibility of a reduction, since crude values have relaxed by about $10 to $15 per barrel in the last week. However, producers are not likely to make such a move given continued strong demand amid still-tight supply. These key factors are supporting recent oil price increases, players surmise.

In related news, SK is expecting to receive its first U.S. shipment of the new API Group III Yubase 4-plus product from the companys joint venture refinery in Indonesia. The estimated 7,000 metric ton cargo will arrive into a terminal facility in Houston this weekend. Looking ahead, SK anticipates receiving at least 7,000 metric tons per month. The new Yubase 4-plus is a premium grade to the companys Group III Yubase 4 from South Korea and will be priced accordingly, an SK representative said.

At the close of the Tuesday, July 22, NYMEX session, front-month light sweet crude futures settled at $127.95 per barrel. This close represented a substantial decrease of $10.79 from the July 15 settlement at $138.74/bbl.

Trading of the August NYMEX contract concluded on Tuesday. The September contract, which begins trading today, settled at $128.42/bbl. Analysts and other energy speculators believe that crude prices may bounce back to the mid $135/bbl range in the coming week since the new front-month contract was stronger than the settlement of the August contract. Also, some market watchers expect fresh buying opportunities to emerge now that oil prices are at their lowest level in about six weeks.

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.