Author: Specialist

EMEA Base Oil Price Report 02.11.21

European, Middle Eastern and African base oil markets are mixed this week, with prices continuing to weaken in some regions whilst appearing stable in others. With the end of the year fast approaching, procurement in most markets is slowing as blenders and resellers look to reduce inventories as much as possible.

API Group I oils have seen the strangest moves in some areas. This group of base oils saw record high prices just before summer, and then prices crashed as availabilities improved following maintenance turnarounds at some refineries and the start of a lower demand cycle. Prices fell steeply, and when raw material costs rose some base oil values were below breakeven levels, leading producers to raise prices again. This situation is by no means universal, since some sellers are still keen to move large slugs of Group I grades, particularly into export destinations. To this end, large discounts and low prices are still around the markets and can be negotiated with some suppliers. read more

EMEA Base Oil Price Report 05.10.21

European, Middle Eastern and African base oil markets are steady with only marginal erosion to prices across the various base oil types. API Group I is still taking the brunt of weaker price levels, with solvent neutrals and bright stock continuing the downward trend, although this movement is not quite so marked as seen around a month ago.

Some pundits suggested that Group I demand is demonstrating inherent weakness in the face of continued COVID-19 outbreaks and lockdowns aimed at containing the disease. Group II oils could also face some downward pricing pressure due to a growing delta between prices for the two API groups, which has reached extreme levels. Group I values have not dragged down Group II prices yet, although the latter have come off summer highs. Group III base oils appear to be resistant to any form of price erosion, with levels still climbing, and a firmer number asked by sellers in this sector. There may be a period of stability for API Group III, with some postulating that prices may have reached their zenith and may stabilize around current levels. read more

EMEA Base Oil Price Report 21.09.21

Base oil markets throughout Europe, the Middle East and Africa are mostly showing weakening demand across all types of products, although some groups are faring better than others. API Group I is showing the softest demand as inventories grow longer by the week. Buyers are now running the show for these grades, which were tight during the first half of the year.

Despite a rash of refinery maintenance turnarounds, base oil production is returning to nearly pre-pandemic levels as refiners diverting as much feedstock as possible to base oils, in light of their outstanding margins. Of course, as shortages ease, these margins may decrease. read more

EMEA Base Oil Price Report 24.08.21

Fundamentals in European, Middle Eastern and African base oil markets are vastly different from those in Asia-Pacific and the United States, creating new arbitrage opportunities between the regions. Specifically, product availability is easing in Europe, the Middle East and Africa as supply increases and demand has diminished during the holiday season.

API Group I markets within EMEA regions had been resisting markdowns, but rumors are that in talking numbers for September delivery, prices succumbed to buyer pressure caused by the ever weakening export market and arguments that the June and July run-up in values was not sustainable. read more

EMEA Base Oil Price Report 10.08.21

The base oil scene is taking on the role of a balancing act on global basis. A number of arbitrage opportunities opening up may have the effect of increasing availabilities in tight markets, which may ultimately put pressure on prices to weaken. At the same time these opportunities may also deplete supplying sources, which may stabilize prices in those regions.

The arbitrage varies depending on type of base oil, but certainly there is scope for supplies from areas such as the Baltic to supply into regions such as the U.S. whilst at the same time Asia-Pacific sources have an open arbitrage for some grades such as API Group II and Group III for supply into both Europe and the United States. read more

EMEA Base Oil Price Report 27.07.21

Prices for certain grades of base oils have fallen sharply over the past few weeks, particularly API Group l grades – some of which have fallen by more than $100 per metric ton. Some say that this was inevitable given the speed of the preceding run-up and the heights that prices reached during May and June.

Although solvent neutral prices have been slashed, bright stock appears to be holding up and has dropped only slightly from its peak. API Group II and Group III base stocks appear to be riding out any pressure from buyers trying to negotiate lower numbers for August deliveries. Lighter viscosity grades of Group II have seen some downward adjustments over the past week or two, but Group III remains short and hence firm, with the upper boundary of price ranges remaining steady. read more

EMEA Base Oil Price Report 13.07.21

After a long, steep run-up price relief has come to at least parts of base oil markets in Europe, the Middle East and Africa. API Group I grades are seen as lower this week due to the end of the refinery maintenance season and to increased run rates from refineries that are gearing up to produce more transportation fuels and hence greater quantities of base oil feedstocks. Those trends appear to have momentum to continue for the next few months.

Group II and Group III products, however, are seen to be stable to firm with various markets seeing tightness for these grades. Europe is particularly tight, even against the backdrop of an open arbitrage from Asia-Pacific sources where markets have loosened up over the past month. read more

EMEA Base Oi Price Report 29.06.21

Base oil markets around the Europe, Middle East and Africa regions are witnessing extraordinary events at the moment, with supplies drying up and prices maintained at all-time highs.

However, there are pockets of supply where refiners are desperate to move product due to lack of local or regional demand. Such is the case in Turkey where the local refinery in Izmir is having to participate in export markets to move inventory. This is the case where local demand has collapsed for the API Group I grades available from this source. read more

EMEA Base Oil Price Report 15.06.21

Supply of API Group I base oils is easing somewhat in Europe, the Middle East and Africa, but availability remains snug – especially in Europe – and prices have not dropped. Group II values are also steady, and Group III prices have begun to rise again on the back of a scarcity and rising feedstock costs.

Many in the market had anticipated that base oil availabilities would improve when refiners started to ramp up output of transportation and in the process increased production of vacuum gas oil, which is used as a feedstock for base oils. So far, base oil availabilities do not appear to have improved, though some suggest that the effect on base oils may take some time to materialize. Buyers have been trying to negotiate prices but in most cases without much success. Sellers recognize that supply is still woefully short for all types of base oil and are refusing to budge from the high levels established the past few months. read more

EMEA Base Oil Price Report 18/05/21

Remarkably, the base oil supply scene tightened further the past two weeks as availability in all product groups diminished. API Group I supplies remain exceptionally elusive as maintenance turnarounds take their toll and producers advertise few spot availabilities.

Group II is also becoming scarce, some buyers being unable to procure quantities necessary to produce contracted volumes of finished lubricants. Some large end-users are in turn struggling to maintain their own operations and output of machinery and goods. Group III supplies are remote, with sellers offering to supply only regular customers – in many cases with lags of up to three months. New buyers looking for material in any of the base oil groups are struggling to find availabilities, and the situation is preventing any flexibility in base oil purchasing. These conditions have caused prices to remain firm. Many sellers are raising prices on a routine basis, some adopting weekly reviews that consistently result in the same action. read more