Reacting to the news, participants commented that increases are generally difficult to implement at this time of the year, because product requirements typically decline and inventories start to build, placing downward pressure on price indications.

Another factor that was dampening the chance of implementation was volatility in upstream segments. Crude oil futures have fluctuated over the last few days, reacting mostly to geopolitical tensions in various parts of the world.

Oil futures surged on Tuesday on reports by the American Petroleum Institute of the largest U.S. crude stocks draw of the year. The API report revealed a huge crude oil inventory draw of 10.961 million barrels for the week ending July 18, compared to analyst expectations of a decline of around 4 million barrels.

Futures received an additional push from continuing tensions between Iran and most of the Western world over a series of oil tanker attacks and vessel seizures in the Persian Gulf. Libyas lifting of a force majeure on its largest oilfield, Sharara, failed to weigh prices down.

On July 23, West Texas Intermediate August futures settled at $56.77 per barrel on the CME/Nymex and had closed at $57.62/bbl on July 16.

Brent futures for September delivery settled at $63.83/bbl on the CME on July 23, and had closed at $64.35/bbl on July 16.

Light Louisiana Sweet crude wholesale spot prices settled at $63.12/bbl on July 22, compared to $64.55/bbl on July 15, according to the Energy Information Administration.

Low sulfur vacuum gas oil and high sulfur VGO were both at Aug WTI plus $14.75/bbl ($70.97/bbl) on July 22. By comparison, low sulfur VGO and high sulfur VGO were both hovering at $73.06/bbl on July 15, according to data published by OPIS PetroChemWire.

Demand in domestic base oil circles was described as flat, with suppliers hoping that activity picks up in September, once the summer holiday period in the U.S. comes to an end. Spot prices were generally maintained, although there were pockets of the market where competitive activity was starting to emerge due to the ample availability of base stocks.

In the Group III segment, business was characterized as steady, with fewer competitive movements noted as the relative newcomers in the U.S. market – the Middle East producers – have secured regular business and there was less of a push to capture new accounts. Most blenders are gearing up for GF-6 formulas to be implemented, likely in the spring of 2020, a source noted, which could lead to further shifts in Group III usage.

Export activity of U.S. Group I and II barrels and lubricants into Mexico appeared to be still steady at best, while buying appetite from South American countries, including Brazil, has slowed down, but was likely to pick up as the warmer spring/summer months in the Southern Hemisphere were around the corner.

In other market news, as the shipping and oil industries prepare for the implementation of the IMO 2020 low-sulfur marine fuel cap, more ports are striving to offer increased compliant fuel supply and bunkering services. Jamaica is taking steps to become a true logistics hub for the Caribbean region, given the projected increase in shipping traffic made possible by the widening of the Panama Canal, with local bunker suppliers expecting to meet the demand for compliant fuels in 2020 and beyond, Livebunkers.com reported.

Additionally, Jamaicas Port State Control officers will be preparing to inspect facilities on board to ensure compliant fuel is in use, or that the vessel is equipped with devices such as scrubbers to regulate the sulfur emissions.

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