Base oil producers expressed optimism that orders have become more steady, stating that a number of grades appear less oversupplied than at the end of August.
As one source described, “I wouldnt call the market long, and wouldnt call it tight. Its decently balanced with manageable length.”
While pockets of the market still have more than adequate supply, others have tightened due to unexpected production issues and an increase in buying interest.
One large refiner was heard to have experienced a small hiccup in API Group II 600 neutral production, leading it to abstain from offering spot barrels of this grade, while sales of its other cuts continue unabated.
Conversely, another producer was heard to have stopped offering the light-viscosity grades for spot transactions, but appears to have plenty of 600N available, while a third supplier is also actively pursuing spot business with its 600N cut.
Posted prices remained unchanged for the week, but there continued to be downward pressure on a few spot numbers given ample availability of most grades. However, prices for Group I bright stock were supported by a lack of readily available spot cargoes, with lots of business being concluded into Mexico, sources noted.
As the remnants of Hurricane Florence dissipated, Chemlube International, reported that its blending plant in Savannah, Georgia, did not suffer any damage and did not have to idle operations. Logistics were partly affected by the severe weather conditions, and the company was forced to postpone or reroute a few tanker truck shipments to customers located north of the plant, but there were no major delays. Rail movements, which had been on hold in and out, were back to normal, a company source reported.
In other market news, SK Lubricants Americas announced bulk availability beginning this month of a Group II bright stock. The product, SK120BS, has viscosity of 24 cSt (at 100 degrees C), viscosity index above 102 and high color purity. It also has a low pour point due to the significant catalytic hydroprocessing it undergoes and its high iso-paraffin content.
SK said its bright stock will be available in bulk tank at its Houston base stocks terminal. The company began to post its price on Lube Reports price table starting with this weeks issue.
Upstream, crude oil futures surged early Tuesday after reports that Saudi Arabia might be comfortable with Brent crude moving above $80/barrel as the global market adjusts to the loss of Iranian supply due to U.S. sanctions. The latest Saudi Arabian production figures showed a decrease in output.
Saudi Arabia, Russia and other major oil exporters are scheduled to meet on Sunday in Algiers to review the oil market, Bloomberg reported.
West Texas Intermediate October futures settled at $69.85 per barrel on the CME/Nymex Tuesday, up 60 cents per barrel from $69.25/bbl on Sep. 11.
Light Louisiana Sweet crude wholesale spot prices settled at $76.56/bbl on Sep. 17, compared to $74.60/bbl on Sep. 10, according to the U.S. Energy Information Administration.
Brent was trading at $79.03/bbl on the CME Tuesday, down from $79.06/bbl on Sep. 11.
On Sept. 14, low-sulfur vacuum gas oil was at October WTI plus $17.50/bbl ($86.39/bbl), and high-sulfur VGO was at crude plus $16.50/bbl ($85.39/bbl).
By comparison, low-sulfur VGO was hovering at $85.54/bbl and high-sulfur VGO at 84.54/bbl on Sep. 10, according to data published by PetroChemWire.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase inExcel format.