Both benchmark prices are for February front month. ICE LS gas oil, a marker for crude products, is being quoted at $576 per metric ton for January settlement.

Europe

European API Group I export prices are unchanged, with no reports of significant year-end discounting. Light solvent neutrals are priced between $695/t and $730/t, while SN500 and SN600 are $775/t-$795/t. Bright stock is still in demand, though the absence of traders this week makes it unlikely that new cargoes were fixed. Prices contained in sales offers are still $855/t-$875/t.

Buyers confirmed that some offers have been left open, with validities extended through the first days of 2018. This must mean that sellers are confident that there will be no reason to adjust prices during this period.

The prices above refer to large cargo-sized parcels of Group I offered on an FOB basis ex-mainland European supply points.

Group I sales within Europe have slowed to the point that only contract or per-arranged deliveries are now taking place. The markets will be extremely quiet for more than a week as many finished lube blenders use the holiday period to perform routine maintenance and repairs. Some smaller lube producers have actually closed until after the New Year.

Prices are flat and there have been few notices of changes from Jan. 1. Such stability in raw material costs allows lube marketers to predict expenses further into the future and in turn to offer longer term arrangements to their own customers.

The spread between local FCA prices and spot export values is unchanged at 50/t-70/t.

Similarly, Group II sales are experiencing the same seasonal inaction as domestic Group I trade. Light-viscosity grades up to 220N are at $675/t-$695/t, while 500N and 600N are $835/t-$855/t. These nominal imported CIF prices are for large bulk cargoes being landed CIF into Antwerp-Rotterdam-Amsterdam and are gathered from shipping agents and forwarders who handle documentation for imports. Once ancillary costs and margins are included, FCA or locally delivered prices are around 785/t-815/t for light-vis grades and 850/t-885/t for heavies.

One large cargo of Group III base oils with a partial slate of finished lube approvals discharged into Northwestern Europe with word that landed prices are slightly higher than previous cargoes. Whether this is a direct attempt to raise selling prices on a local basis or just a reflection of higher FOB and freight costs is not yet clear.

Prices for bulk quantities landed into Northwestern Europe in bulk are now assessed at $795/t-$825/t, on a CIF basis, for 4 centiStoke and 6 cSt grades. Local euro sales remain at 695/t-720/t, FCA Northwestern Europe. Group III grades with full European and other international OEM approvals available on an FCA basis in Antwerp-Rotterdam-Amsterdam are still priced at 790/t-825/t for 4 and 6 cSt grades and 765/t-785/t for 8 cSt.

These latter prices refer to ex-rack sales or truck-delivered quantities.

Baltic and Black Seas

Compared to last year, loower quantities of Russian export barrels are being sold through Baltic traders and distributors. This may be due to higher demand for Group I base stocks within Russia, or that alternative markets such as China are becoming more economically attractive to refiners. However, there is still a raft of the usual short-sea trade parcels being produced for Antwerp-Rotterdam-Amsterdam, Scandinavia and the United Kingdom, along with some other interesting inquiries for material to go to India. The economics of the latter route remains unknown. Sources said a potential shortage of Iranian barrels due to maintenance turnarounds is causing other sources to be examined.

FOB prices, which are sometimes established on the basis of netbacks, remain between $675/t-$690/t for SN150, $735/t-$750/t for SN500, $775/t-$795/t for SN900 and $880/t-$920/t for bright stock.

Turkish imports of Group I base stocks from the Black Sea and Eastern Mediterranean appear to have taken a break during the seasonal holiday period, but parcels of Group III oils continue to come into the Turkish market. Turkey has no domestic production of Group III, and this grade appears to be playing a growing role in the market.

Contracted supplies discharging into Derince, Turkey, from Greek sources have prices assessed on an indication basis only at $745/t-$765/t for light neutrals and $825/t-$840/t for SN600, basis CIF.

Middle East Gulf

Middle East Gulf regions may be mostly Muslim, but the current holidays are still celebrated. The result is that many companies have closed for extended weekends, although manufacturing facilities including lubricant blenders still continue to operate.

News is light from Middle East Gulf sources this week, although there are announcements of offers for Group I and Group II cargoes from U.S. Gulf Coast sources. This may be a reaction to the lack of Iranian heavy neutral barrels available in the market or perhaps the delay in start-up operations of the Luberef Group II project in Saudi Arabia.

Prices for heavier neutrals being offered as imports would have to be in the region of $800/t, basis CIF Middle East Gulf ports, which may be possible given that large parcels are to be shipped, often in tandem with material offered into India. Iranian exports may be stalling, and premium SN500 from Sepahan Oil would normally be priced round $785/t-$795/t FOB, which could compete with incoming material from the U.S. and other sources, such as the Baltic

Group III base oil exports have been scaled back a little, with only one Far East parcel being identified loading out of Al Ruwais. Netback prices remain unchanged from the last report, with material from Al Ruwais at $735/t-$765/t for 4 and 6 cSt. The same grades are available from Neste in Bahrain at a netback higher by some $65/t-$90/t.

Prices for Group II base stocks offered CIF Middle East Gulf ports are heard at $732/t for 100N and $893/t for 600N, CIF Middle East Gulf. Levels for local United Arab Emirates sales of Group II base oils on FCA or delivered basis are still around $840/t-$875/t for 100N, 150N and 220N, with 500N and 600N between $955/t-$985/t.

Africa

There is no further information or news regarding activity in South Africa this week, and sources in that region have announced that they will be absent for the next couple of weeks due to the holidays.

West African buyers outside of Nigeria are reportedly looking to take a large Group I cargo during January, which will stop first in Guinea around late January or early February. Stops in Ivory Coast and Ghana may follow, although the Ghana supply will not form part of the Tema tender.

The Nigerian market appears subdued after the large quantities of base oil that were imported into this region during October and November. News that the Kaduna refinery has finally given up hopes of resuming base oil producction came as no surprise. The refinery in northern Nigeria was ill-placed to serve the national market produced poor quality Group I when it ran.

Nigerian prices remain as last reported: $825/t-$845/t for SN150, $865/t-$890/t for SN500, $968/t for bright stock with a viscosity index of at least 85 and $993/t for bright stock from the Mediterranean with VI of at least 95. In addition, Baltic SN900 is assessed at $944/t.

The prices above refer to quantities of Group I base oils delivered CIF/CFR Apapa, Lagos, in parcels totaling at least 5,000 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.