Dated deliveries of Brent crude posted in London yesterday at $75.80 per barrel for August front month settlement, just some 20 cents per barrel different from last. West Texas Intermediate crude also nearly flat at $65.10/bbl for July front month, keeping the crack around $10.50/bbl. ICE LS gas oil was nearly flat at $667 per metric ton, still for June front month.

Europe

Prices for API Group I exports from Europe are mixed with many suppliers willing to entertain lower bids for spot trades, while others are apparently determined to move prices upwards by some $40/t. There does appear to be more availability around the markets; buyers said it was easier this week to locate needed parcels of base stocks.

Prices are realigned this week with light solvent neutrals now between $785/t-$835/t and heavier grades also slightly softer at $885/t-$925/t. Bright stock prices appear to be softer at $955/t-$985/t. The wider ranges for these products suggest some sellers have reduced values while others have moved numbers upwards.

The above levels pertain to large cargo-sized parcels of Group I base oils sold or offered on an FOB basis ex mainland European supply points, always wherever and whenever available

Prices for Group I sales within European markets have been flatter, at least so far. Buyers said they did not see markups nor discounting since the start of the month. Those buying from the previously mentioned major expressed disbelief about 25/t-35/t hikes that take effect June 8th. Some said that they are considering alternative sources.

Demand dipped ahead of the summer holiday period, when most blenders traditionally reduce inventories

The gap between domestic and export levels widened due to the softening of most export levels. The differential between the two sets of prices is assessed between 60/t-90/t.

Group II prices are also flattening. European markets are becoming more competitive as suppliers focus on market share. Existing suppliers are trying to hang on to established customers, while newcomers attempt to gain a foothold. FCA prices are maintained this week at $875/t-$920/t (745/t-785) for light neutrals and $955/t-$975/t (815/t-820) for 500N and 600N.

Group III prices stabilized following hikes the previous week. Demand for 6 centiStoke grades are still in higher demand. Oils with partial slates of finished lubricant approvals are 765/t-780/t for 4 cSt, 785/t-800/t for 6 cSt and 785/t-790/t for 8 cSt, all on an FCA basis. Group III oils carrying full slates of ACEA and European OEM approvals are 800/t-825/t for 4 cSt, 820/t-845/t for 6 cSt and 825/t-850/t for 8 cSt, all on an FCA basis from Antwerp-Rotterdam-Amsterdam.

The latter prices are for ex-rack or truck delivered smaller lots of Group III, not bulk cargoes to large users such as major blenders or additive manufacturers, which may be priced considerably lower.

Baltic and Black Sea

Baltic reports contain news that at last a large cargo for Nigeria has been fixed and will load during the next week or so. However distributors and resellers still place a high dependency on cargoes going into Antwerp-Rotterdam-Amsterdam, the United Kingdom and Scandinavia for contracted and spot routine sales of Group I. North African receivers are said to be looking at parcels of Baltic material, which now look competitive against Iberian- or Italian-sourced base stocks.

Prices are a mixed bunch from this region, with some of the vagaries of the mainland markets extending to Baltic supplies. Prices for some oils are rising, whilst other examples of cargoes fixed show levels dipping slightly against previous FOB levels.

The two main Russian export grades of SN150 and SN500 are respectively between $760/t-$820/t and $845/t-$895/t, again showing a widening of the ranges. SN900 is assessed at $905/t-$930/t, and bright stock is $885/t-$985/t, depending on source and loadport.

Black Sea sources have yet to confirm the large cargo loading on an STS basis at Kavkaz, Russia. Middle East Gulf receivers, searching for base oil feedstock from Black Sea sources failed to locate any. Refiners have turned down requests to supply these products, saying this material is only for internal use.

Group I base oils from Mediterranean sources are going into ports such as Gebze and Derince, Turkey. Prices have been heard at around $845/t-$860/t for light neutrals and $915/t-$965/t for SN500 and SN600. Group III material ex Mediterranean are indicated into Gebze at around the same levels as previously noted, $900/t-$940/t or equivalent for 4 and 6 cSt grades, basis CIF. Group III base oils with partial slates of approvals are also offered into the Turkish market.

Middle East Gulf

Red Sea cargoes are predominantly loading from Yanbu and Jeddah, Saudi Arabia, for discharge into the West Coast of India, Oman and the United Arab Emirates. Sudanese sources are yet to confirm the cargo of Group I base oils, as is also the case for the inquiry for Group I material to be delivered into Aqaba, Jordan.

With the Holy Month of Ramadan ending during next week, Middle East Gulf trade has been quieter than normal the past couple weeks, and with the Eid holidays following Ramadan, activity is expected to be muted perhaps until the end of June. Following the Eid holiday there comes a period in the Middle East Gulf regions when many expats leave for the summer, and while routine activity carries on, trade tends to slow during the summer months.

Iranian cargoes of SN500 base oils are being offered to receivers in the U.A.E. and also Mumbai anchorage, for loading after Ramadan during the second half of June, although there does not appear to be so many movements of Iranian base stocks as in some months gone by. Supplies of these grades has been sporadic to say the least, even before renewed U.S. sanctions, which the market now considers inevitable.

A U.A.E. source said prices for premium Iranian SN500 are expected to be around $855/t-$865/t delivered into one or more of the Sharjah ports, suggesting that they are loading on an FOB basis in Bandar-e Emam Khomeyni for $825/t-$840.

Middle East Gulf Group III trade has slowed the past two or three weeks, perhaps due to Ramadan Holy Month, but sources report that stocks are in place to deliver a number of large cargoes from Al Ruwais, U.A.E., and Sitra, Bahrain, over the next few weeks. These cargoes are mostly bound for India and the U.A.E., but also the Far East, Europe and the U.S.

Prices remain unchanged at $795/t-$820/t for 4 and 6 cSt oils with partial approvals ex Al Ruwais. Very similar prices pertain to material being shipped from Sitra by Bapco. Neste markets oils from the same site, but it carries full slates of approvals, and this affords thems greater value.

Notional FOB prices for Neste oils are expected to be around $835/t-$865/t for 4 and 6 cSt and 8 cSt base oils being priced higher by some $10/t-$20/t. These numbers refer to FOB levels established on a netback basis using published shipping freight rates, and taking into account advised CIF/CFR prices from various sources.

Ramadan appears not to have affected Group II cargoes flowing from Yanbu. Supplies resold from the U.A.E. are limited this week, but grades available on basis FCA, truck- or flexitank-delivered basis, are being priced at $1,025/t-$1,060/t for light grades and $1,120/t-$1,170/t for 500N and 600N. There have been reports of 500N being offered from various sources at $890/t ex-tank U.A.E.

Africa

South African shipping sources report further movements of European Group I base oils coming into Durban during July, with large cargoes now regularly going into the South African local markets where prices are reported to be extremely attractive to sellers. Local taxes and duties are applied to these imported grades however, plus transportation and handling costs, hence the South African government and transportation companies may take a reasonable slice of the higher prices being “retailed” in the markets.

Nigeria receivers announced another large parcel of base oils to load out of U.S. Gulf Coast during second half June, this being in addition to the large cargo reported sold out of the Baltic. Once again there is talk of the U.S. Gulf Coast cargo comprising of Group II grades. There is a small demand for these types of lubricants. which up until recently have always been imported as finished grades, but this may be starting to change for some of the major and larger blenders in Nigeria.

Prices for Group I going into Nigeria are revised this week, but until final prices are announced on Baltic and further U.S. Gulf Coast cargoes, actual confirmed levels are not posted. As indications only, light neutrals are assessed at $875/t-$925/t and heavy grades at $975/t-$998/t. Bright stock ex U.S. Gulf of coast or lower Baltic remains at $1,025/t-$1,050/t, and SN900 from the Baltic has been assessed at around $1,000/t.

These prices refer to large parcels of Group I base oils delivered CFR or CIF into Apapa port, Nigeria.

Ray Masson is director of Pumacrown Ltd., a trader and broker of petroleum products in London, U.K. Contact him directly atpumacrown@email.com.