The increase came as surprise to many participants as the market had been fairly quiet due to the summer holidays.

Despite the seasonal slowdown, however, suppliers had noted that orders continued to come in, helping tip the supply and demand balance towards the snug side. Spot availability has been very limited for the last several weeks.

Sellers also admitted that some buyers had turned cautious towards purchases as they were hoping prices would drop on the back of the traditional summer lull and recent fluctuations on the feedstock side.

Spot availability of a majority of base oil grades remained strained, with the API Group I cuts heard to be particularly scarce.

Requirements for Group I bright stock were deemed healthy, and prices have climbed to levels around $3.30 per gallon at Brownsville, Texas, on the border with Mexico.

Reports continued to be heard that some bright stock cargoes had been imported into the United States – where spot supply was very limited – and re-exported to Mexico as buying interest there remained strong. Spot volumes of the lighter grades were also difficult to come by, sources added.

A Group I cargo from the U.S. was heard to have been sold through a trading company to Africa, to be shipped in the next few weeks.

Participants also commented that there had been some Group II 600N spot cargoes offered in the market, but specific price points could not be ascertained. The other Group II cuts were still quite tight and there were hardly any spot offers for these products.

Most sources did not expect the supply tightness to ease until late August or September. Honestly, I do not see any spot barrels of any significance showing up until September, a source noted.

The heavier grades were anticipated to become slightly more available next month than their light counterparts.

Upstream, crude oil prices edged up as data published last week by the Energy Information Administration showed that U.S. oil imports from Saudi Arabia have dropped since the start of June. At the OPECs committee meeting in Russia on Monday – which included some non-OPEC producers – Saudi Arabia said it would cut August exports. Nigeria, which has been exempt from this years OPEC production cut deal, promised not to exceed daily production of 1.8 million barrels.

West Texas Intermediate futures on the CME/Nymex traded at $47.89 per barrel on July 25, up $1.49/bbl from $46.40 per barrel on July 18.

Light Louisiana Sweet wholesale spot prices closed at $48.78 per barrel on July 24, compared with $48.37 per barrel on July 17, according to data from the U.S. Energy Information Administration.

Brent was trading at $50.20/bbl on the CME on July 25, up $1.36/bbl from $48.84/bbl on July 18.

Low sulfur vacuum gas oil was at Sep. WTI plus $8.65/bbl ($54.99/bbl), and high sulfur VGO was at crude plus $7.40/bbl ($53.74/bbl) on July 24. Low sulfur VGO was trading at $54.67/bbl, and high sulfur VGO was at $53.42/bbl on July 17, according to PetroChemWires Daily Refinery Focus.

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