European Group II prices are also stable this week as participants await the introduction of the European Unions new quota system Group II imports. It remains to be seen if major importers rush to move large cargoes into hubs around Europe to beat the semi-annual 200,000 metric tons limit on tariff-free imports.

The Group III oils are still oversupplied, but the past week was bereft of any meaningful activity in this segment.

Crude oil and feedstock prices rose the past week on political and economic concerns – in particular impeachment proceedings against U.S. President Donald Trump and worse than feared economic stats from China and major European countries. Dated deliveries of Brent crude rose approximately $3 to $68.85 per barrel for February front month settlement, while West Texas Intermediate climbed to $62.15/bbl, also for February front month.

ICE LS gas oil increased by some $20 to $631 per metric ton for January settlement. These prices were obtained from London ICE late Monday.

Europe

There was no sign of notable new Group I cargoes being exported from Europe as the offices of most traders were either closed or operating with skeleton crews. Prices were unchanged with solvent neutral 150 between $545 per ton and $580/t, SN500 at $555/t-$580/t and bright stock at $615/t-$650/t.

These levels refer to cargo-sized parcels of at least 2,000 tons, sold on an FOB basis ex mainland European supply points, always subject to availability.

Group I trade within the region is also slow. Accountants and auditors addressing year-end matters are the only personnel in the offices of many blenders around Europe.

Some blenders expressed concerns about potential supply problems after a fire at a major refinery in Northwestern Europe, but others said they had already made arrangements with other suppliers and resellers to cover any shortfall.

The price differential between Group I exports and sales within the region remained at 45/t-65/t, with export values being lower.

Group II markets remain quiet with prices holding up in spite of weaker Group III numbers. Supply and demand have been largely in balance over the past few months. Values are at $745/t-$790/t (675/t-740) for 150 neutral and 220N, while 500N and 600N are at $785/t-$825/t (715/t-750).

These values apply to the wide range of Group II base oils, including European and U.S. grades with full slates of approvals and those with partial or no approvals from the Middle East, the Far East and the U.S., some of which are imported in flexitanks.

Downward pressure on Group III oils has eased in recent weeks, but primarily because of slowing activity. The segment will be under scrutinty when the markets return next week. The Group II quota system could benefit Group IIIs suppliers if prices are competitive.

Prices remain unchanged this week, with partly-approved grades at 650/t-725/t for 4 centiStoke and 665/t-740/t for 6 and 8 cSt, basis FCA ex hubs in Northwestern Europe. Grades with full approvals are at 740/t-810/t for 4 cSt, 770/t-840/t for 6 cSt 755/t-820/t for 8 cSt.

Baltic and Black Seas

Baltic prices for Russian exports are unchanged at $465/t-$490/t for SN150 and $470/t-$498/t for SN500, both on an FOB basis. Bright stock ex Gdansk is still at $620/t-$650/t, FOB.

Black Sea sources report few new trades this week, with only suggestions that there may be follow-up cargoes to load during January ex the STS facility at Kavkaz, Russia. These are in addition to the cargoes identified last week for two parcels, one of 12,000 tons, and the other of 5,000 tons. STS prices for these Russian exports grades remain around $455/t for SN500 and $435/t for SN150.

There are no reports of new Russian exports moving into Turkey, but values remain at $498/t CIF for SN500 and $487/t for SN150, basis CIF.

Mediterranean sourced Group I remains attractive against local Turkish prices, which are unchanged during the last week. Indications for Mediterranean offers are $578/t for SN150 and $586/t for SN500, basis CIF Gebze or Derince. SN600 may be offered at around $595/t, with bright stock around $668/t, all on the same CIF basis.

Group II and Group III grades continue to be offered ex tank in Turkish ports with prices at $700/t-$745/t for all Group II grades and $790/t-$825/t for unapproved Group IIIs.

Middle East Gulf

There are still shipping inquiries on the table from Saudi Arabian Red Sea suppliers, maybe due to shipbrokers and vessel operators going quiet at this time of the year, but there is news that this supplier with the additional of a sister company from South Korea had supplied in excess of 50,000 tons of base oils to India alone, during December. The majority of these supplies originated from Yanbual Bahr and Jeddah, Saudi Arabia.

News is still awaited on the 5,000-ton cargo that receivers in the United Arab Emirates could take from Kavkaz, Russia, possibly to substitute for any shortfall on Iranian supplies into this region. Prices for premium Iranian SN500 are said to be around $525/t-$540/t, on an FCA basis U.A.E., and Russian export barrels from the Black Sea could compete around the same levels.

Group I offers from the U.S. Gulf Coast for U.A.E. receivers are indicated at around $589/t for SN500, $579/t for SN150 and $666/t for bright stock, basis CIF U.A.E. ports.

Notional FOB prices for Middle East Gulf exports of Group III base oils ex Al Ruwais, U.A.E., and Sitra, Bahrain, are unchanged this week due to lack of information. Prices are at $650/t-$690/t for all viscosity grades of partly-approved Group III base oils sold into Europe, the U.S., India and the Far East, except 8 cSt grades sold into India and Far East will produce lower FOB prices due to lower local selling prices.

Fully approved Group III oils ex Sitra refinery should contribute higher notional netbacks and are estimated to be at $760/t-$855/t for 4, 6 and 8 cSt grades.

Notional FOB prices on a netback basis are based on prices derived and informally assessed from regional selling levels, less marketing, handling and freight costs.

Middle East Gulf regional Group II prices remain stable with many of the Middle East Gulf players missing during the holiday season. Prices are unchanged at $745/t-$900/t for 100N, 150N and 220N, while 500N and 600N are at $755/t-$910/t, all on an FCA basis ex U.A.E. hub storage.

Africa

North African imports from European Mediterranean sources are quiet this week with only one main cargo identified moving into Mohammedia, Morocco, possibly from northwestern Italy or Spanish Mediterranean. The vessels and dates for the Egyptian General Petroleum Corp. supplies of bright stock still remain uncovered from shipping sources, but it is suggested that there may be some form of time-charter or COA for vessels to perform these deliveries between Yanbual Bahr or Jeddah and Alexandria.

West Africa has gone into holiday mode and will continue to be very quiet from an inquiry and negotiation stance until players return to work next Monday. Shipping agents reported the arrival of one vessel that loaded a base oil cargo out of the Baltic. Still no confirmation of cargoes loading out of U.S. Gulf Coast, although one Nigerian source did suggest that such a parcel may be loading promptly and may yield more news during the next few days.

Prices for Group I oils arriving into Nigerian ports are unchanged at $630/t-$645/t for SN150, $640/t-$655/t for SN500 and $720/t-$745/t for bright stock, all on a CIF or CFR basis ex Apapa port in Lagos, Nigeria. Blended SN900 is indicated at $650/t-$675/t. These prices apply to cargoes of at least 10,000 tons.

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

Historic and current base oil pricing data are available for purchase inExcel format.