The winter lull appears in effect in the U.S. base oil market, with buyers and marketers noting a slowdown in demand, especially for light to mid neutrals in paraffinics. Base oil orders typically slow in December, as finished lubricant production ebbs and blenders try to minimize inventories before the year closes.
One buyer said demand in paraffinics is clearly way off at the moment, and that supply, for the first time in a long time, is outstripping demand. Except maybe for some minor implications around turnarounds, the market supply-demand is pretty healthy. I think its certainly a buyers market for a variety of vis grades.
This buyer said light neutrals, including 100 and 150, are very long at the moment, adding, take your pick.
A base oil marketer pointed to a fall-off at years end, particularly on light neutrals, where supply is outstripping demand. A lot of people attribute it to buildup of inventory over the summer after all the shortfalls. Mid and heavy neutrals remain pretty strong, the seller said. That doesnt come as a surprise. Things are pretty normal, Id say. After such a tumultuous year, were having things end peacefully and routinely.
Others feel demand seems softer than typical for December. Its normally soft this time of year anyway, but it seems like its softer than usual, at least for particular motor oil type base grades, one base oil marketer noted. It seems like there is a fair amount of light viscosity base oil available of the 100, 150 type.
While the naphthenics market also generally slows down in December, some say it still seems robust.
Weve had a pretty spectacular year in terms of demand, one naphthenic marketer commented. Its there, and were supplying it. Business has been pretty strong, and weve been fairly tight on all of our grades.
Posted paraffinic base oil prices are unchanged in the United States this week. Crude closed at $60.95 per barrel yesterday on the New York Mercantile Exchange, according to Bloomberg. That was $1.58 below the price a week ago.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.