While the general sentiment was that base oil values would come under downward pressure as they typically do during the third quarter, crude oil price fluctuations remained unpredictable, keeping base oil consumers on guard.

As downstream sectors tend to slow down after a ramped-up production period in the spring and summer, price decreases in the second half of the year are not uncommon.

Additionally, there were almost no plant turnarounds scheduled during the last half of the year compared to a string of shutdowns in the first half, which had resulted in very tight conditions and a steady rise in price indications.

A couple of routine maintenance programs were expected to take place in China in the next few months, and one plant was anticipated to come back on stream in August – following an extended shutdown – but these events were not expected to significantly affect availability.

There were offers of Russian material on the table as well, but Chinese importers did not seem very eager to secure added volumes because the lubricants market outlook was uncertain.

In Taiwan, base oil availability was heard to have improved as Formosa Petrochemical Corp. has built inventories following some light production hiccups earlier in the year. The Taiwanese producer was understood to be offering additional spot barrels into China this month, while keeping contract volumes unchanged.

Formosa was also heard to have lowered domestic list prices for its API Group II base oils. August shipments of the producers 70 neutral base oils were reduced by New Taiwan Dollar 28 cents per liter from Julys values.

Likewise, Formosa trimmed August domestic list prices for its 150N grade by 28 cents per liter compared to July.

The domestic list price of the producers 500N base oil underwent a decrease of 78 cents per liter. These price decreases follow similar downward adjustments implemented in July as domestic availability improved.

While these decreases took place at the local level, price indications in the region were generally deemed steady to slightly softer from a week ago as buyers resisted offers and bid figures at least $20 per metric ton below current selling ideas. Discussions centered on the price ranges mentioned below, although very few deals were reported during the week.

On an ex-tank Singapore basis, Group I solvent neutral 150 was notionally down by $10/t at $690/t-$710/t. SN500 and bright stock were also down by $10/t at $840/t-$860/t and $930/t-$950/t, respectively.

Group II 150 neutral was steady at $700/t-$720/t, and 500N was assessed lower by $20/t at $890/t-$910/t ex-tank Singapore, although deals could not be confirmed.

On an FOB Asia basis, Group I SN150 was holding at $560/t-$580/t. SN500 was heard down by $10/t at the high end of the price spread, to $730/t-$750/t FOB, with deals heard concluded closer to the low end of that range. Bright stock was hovering at $760/t-$780/t, with a regional deal reported at $765/t FOB Asia.

Group II 150N was assessed down by $30/t at $570-590/t to reflect current discussions, and the 500N/600N grades slipped by $20/t to $800/t-$820/t, all FOB Asia.

In the Group III segment, the 4 centiStoke and the 6 cSt grades were unchanged at $760/t-$780/t, and the 8 cSt cut at $740/t-$760/t FOB Asia, with discussions in this segment heard to be thin.

Upstream, crude oil futures slipped on Monday on concerns that the major oil producers would not adhere to the agreed output caps as an OPEC meeting got under way in Abu Dhabi, United Arab Emirates, early this week.

Analysts were also anticipating the end of the summer driving season in the United States, with consumer demand for gasoline expected to slide and product inventories to start building.

ICE Brent Singapore October futures were trading at $52.16 per barrel at the close of Asias trading on August 7, from $52.51/bbl for September futures on July 31.

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com.