Consumers were not seeking to build up stock positions but rather were trying to work off existing volumes and buy only specific grades when necessary. Sellers, in the meantime, were not overly aggressive in pushing additional base oils toward their contract customers, sources said.

This is not to say there werent suppliers eagerly seeking fresh spot trade opportunities and pitching exceptionally attractive low-priced offers, because there were, sources pointed out. They added that some sellers were willing tochop prices severely, up to 50 to 75 cents per gallon off of already discounted numbers, although this could not be substantiated.

Export activity remained exceptionally thin, but there were rumblings that a few cargoes had been shipped to offshore destinations recently. In one case, a supplier said that a parcel of paraffinic oils (mid-vis and bright stock) had been moved to South America, but price and timing details were not forthcoming. It was also understood that there are regular shipments of naphthenic pale oils finding their way into the Mexican, European and Asian markets.

The staggering drop in automobile sales as well as declines in other manufacturing segments in the last year, which are linked closely or loosely to base oil/finished lubricant streams, are distressing, one player bemoaned.

Some speculated that sales of base oils were down by as much 50 percent in comparison to the same time in 2008, depending on end-use. On average, finished lubricant volumes were said to be off by 35 percent to 40 percent from a year ago, a few sources indicated.

In brief, Federal Reserve Chairman Ben Bernanke said he’s hoping the recession could end later this year, but he cautioned that a full economic recovery will take “more than two or three years.”

The head of the central bank said a turnaround will only occur “if actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability.” He also acknowledged the recovery might not go as well as hoped.

“This outlook for economic activity is subject to considerable uncertainty, and I believe that, overall, the downside risks probably outweigh those on the upside,” he said in prepared remarks before the Senate Banking Committee Tuesday.

At the close of the Tuesday, Feb. 24, NYMEX session, light sweet crude futures ended at $39.96 per barrel, a gain of $5.03 over the week-earlier settlement at $34.93/bbl.

Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.