{"id":3235,"date":"2020-04-14T16:20:27","date_gmt":"2020-04-14T15:20:27","guid":{"rendered":"https:\/\/inscx.com\/trading\/?p=3235"},"modified":"2020-04-14T16:21:48","modified_gmt":"2020-04-14T15:21:48","slug":"emea-weekly-base-oil-price-report-07-04-20","status":"publish","type":"post","link":"https:\/\/inscx.com\/trading\/2020\/04\/14\/emea-weekly-base-oil-price-report-07-04-20\/","title":{"rendered":"EMEA Weekly Base Oil Price Report 07.04.20"},"content":{"rendered":"\n<p><strong>EMEA Base Oil Price Report<\/strong><\/p>\n\n\n\n<p>Economies remain paralyzed by the spread of Covid-19\nwith many employees and their bosses working from home wherever possible. This\ndoes not make for a happy scene for the base oi markets where many players are\nreeling from the potential threats to business, the full effects of which are\nyet to be felt. <\/p>\n\n\n\n<p>The coronavirus pandemic is widespread, and while some parts of the world may be over the worst of the problem, others are just beginning to realize the implications. Europe, the Middle East and Africa are affected, with countries like Italy and Spain badly hit by the pandemic. The United Kingdom and Germany seem to be managing the situation perhaps better than others, but the effects are global, with everyone being subject to restrictions on movement of people and materials.<\/p>\n\n\n\n<p>From what can be gleaned from the base oil markets,\nmany refiners and producers have cut back production of all petroleum products,\nincluding base oils, while maintaining the availability of base stocks to an extremely\nlimited marketplace. Many blending operations have either closed down or gone\nto a skeleton operation keeping finished lubricants moving to critical\napplications such as medical and military transport, in addition to marine and\nland transportation which are vital elements to keep food and medical supplies\nflowing internationally.<\/p>\n\n\n\n<p>Crude oil prices had reached\ntheir nadir during last week, but due to the intervention of United States\nPresident Donald Trump in the battle raging between Saudi Arabia and Russia,\ncrude received a welcome boost in pricing, taking both dated deliveries of\nBrent crude and West Texas Intermediate crude back up the scale at least\npartially. Levels have moved upwards by some $10 per barrel from the low points\nreached last week. <\/p>\n\n\n\n<p>Dated deliveries of Brent\ncrude have moved upwards at $32.75 per barrel now for June front month, with West\nTexas Intermediate crude showing at $26.50\/bbl still for May front month\nsettlement. <\/p>\n\n\n\n<p>ICE LS Gas Oil prices are\nsubject to a very weak market due to the restrictions being imposed on vehicle\nmovements and also warmer weather moving into Europe.\nFor these reasons this market has not reacted with the same percentage moves as\ncrude but has almost reluctantly moved up by around $15 per metric ton over\nlast week\u2019s level to record at a level of $298\/t for April front month.<\/p>\n\n\n\n<p>There are reports around\nwhich suggest that the world is running out of storage capacity for crude oil\nand with tanks full in almost every market, a containment problem could start\nto evolve. This could naturally curtail production output, but even against\nthis backdrop the main players are still ramping up exports to move crude to\nlimited markets where demand is almost zero.&nbsp;&nbsp;\n<\/p>\n\n\n\n<p>Saudi Arabia is trying to convene another meeting of OPEC\nmembers to negotiate production cutbacks which is designed to enable crude\nprices to firm. However, Saudi Aramco in trying to limit production to move\nprices higher, started last weekend by increasing production to 12 million\nbarrels per day, the peak of that country\u2019s output.<\/p>\n\n\n\n<p>These prices were obtained from London ICE trading\nlate Monday.<\/p>\n\n\n\n<p>This week has\nbeen even more difficult to define base oil markets, with many gaps appearing\nin the supply and production chains. Vessel fixtures are down considerably for\ncargoes of base oil, as are the routine purchases ex-tank storage hubs. There\nare a number of majors involved in intra-company movements of base oil, perhaps\nredistributing stocks and supplies into available space in various storage\nhubs. <\/p>\n\n\n\n<p>Prices in this\nreport remain unchanged this week, but are also maintained in wide ranges. <\/p>\n\n\n\n<p>There has also\nbeen a major falling off for enquiries for new cargoes of Group I base oils,\nand with many of the export destinations now in lockdown, it is difficult to\nsee any short term possibility to alter this situation.<\/p>\n\n\n\n<p><strong>Europe<\/strong><\/p>\n\n\n\n<p>European Group I\nexport prices are repeated with SN150 between $425\/t-$540\/t and SN500 at $425\/t-$550\/t.\nBright stock remains assessed between $505\/t-$625\/t.<\/p>\n\n\n\n<p>These levels refer to cargo-sized parcels of at\nleast 2,000 tons, sold on an FOB basis from European supply points, always\nsubject to availability.<\/p>\n\n\n\n<p>Local European\nGroup I markets have seen a dramatic reduction in activity with only a few\nblenders purchasing material from refineries or from storage hubs around the European\nmainland. Prices remain unchanged due to a lack of information coming out of\nthe usual sources. <\/p>\n\n\n\n<p>Those players\nable to make contact this week have commented that they consider the market to\nbe weaker, with some local sales offered at vastly discounted levels. However,\nthey also added that material which is in reseller\u2019s tanks had been bought and\ndelivered sometime back, with sellers unwilling to sell material at a loss,\nthereby maintaining prices as they were prior to the spread of the virus.<\/p>\n\n\n\n<p>Others have\nmentioned that transport can be an issue with many of the drivers and\noperatives either staying at home, or in some cases, self-isolating from the\ndisease. Offices have closed, although some storage installations remain\noperational. Lockdown restrictions mean that very few people are working\nnormally and it may be some months before markets become re-established.<\/p>\n\n\n\n<p>The price\ndifferential between domestic prices and those applying to exports is reported\nat $75\/t-$100\/t, local prices being the higher.<\/p>\n\n\n\n<p>Group II prices\nare suggested to be weaker, but in the light of little evidence to back up\nscenario, prices are maintained this week. The suggestion that some source\ndecreases have started to affect the European markets is yet to be confirmed.<\/p>\n\n\n\n<p>Prices were\nreadjusted last week, and are maintained as such. Wide ranging assessments\nremain at $485\/t-$650\/t (\u20ac445\/t-\u20ac595\/t) for the two lighter viscosity grades (150N and 220N),\nwith higher vis grades (500N and 600N) at $495\/t-$650\/t (\u20ac455\/t-\u20ac595\/t).<\/p>\n\n\n\n<p>These prices apply to Group II oils with full slates\nof finished lubricant approvals as well as those with partial slates or no\napprovals.<\/p>\n\n\n\n<p>Group III trade has stalled\nwith business dropping off due to demand being almost removed from the market.\nWith many units in the automotive sector closed, factory fills using finished\nlubricants have disappeared and with huge reductions of the numbers of vehicles\non European roads, requirements for lubricants have all but disappeared. Group\nIII base oils are increasingly utilized in the new generation of engine oils,\nand with demand gone for these grades, so has demand for replacement\nstocks.&nbsp;&nbsp;&nbsp; <\/p>\n\n\n\n<p>For the sake of good order,\nprices are maintained with partly approved Group III base oils at \u20ac555\/t-\u20ac695\/t for 4\ncentiStoke grades, with 6 cSt and 8 cSt base oils at \u20ac565\/t-\u20ac695\/t. Prices refer\nto FCA supplies ex Northwestern European hubs. <\/p>\n\n\n\n<p>Prices for\nEuropean original equipment manufacturer fully approved Group III base oils\nalso remain in the wider spreads reported last week, at \u20ac595\/t-\u20ac745\/t for 4\ncentiStoke base oils, with 6 cSt grades at \u20ac625\/t-\u20ac765\/t and 8 cSt\noils at \u20ac630\/t-\u20ac775\/t. <\/p>\n\n\n\n<p><strong>Baltic and Black Seas<\/strong><\/p>\n\n\n\n<p>The Baltic\nregion is quiet after the recent spike in activity, when two large cargoes\nloaded out of the region for receivers in Nigeria. Restrictions on movement of\npeople curtailed buying activity to replace stocks from Russian refineries.\nThere may be lower availabilities for Russian export grades over the next few\nmonths, with some resellers and distributors going on to short-time working,\nand others trying to operate from home. <\/p>\n\n\n\n<p>Only one cargo was\nnotified this week, loading out of the Baltic port of Liepaja for the east\ncoast of the U.K. This small cargo of 2,000 tons of Group I Russian grades may\nbe the last for some time, according to sources in the U.K., where demand has\ndied. How contract supplies to resellers in Antwerp-Rotterdam-Amsterdam will be\naffected is unknown at this time. Talks of cancelled shipping fixtures have\ntaken place, although these have not been specific.<\/p>\n\n\n\n<p>Enquiries for\nfuture cargoes are at an all time low, with some sellers trying to contact\nusual traders and receivers to investigate any possibility for trades during\nMay and June. These are met with bland question marks, with few able to read\nhow and when normality will return. <\/p>\n\n\n\n<p>Indications are\nmaintained for any vestiges of trade that may still be around, with FOB prices\nin respect of both SN150 and SN500 grades around $410\/t-$510\/t. SN150, SN500\nand bright stock from lower Baltic sources in Gdansk are merely indicated at\naround $425\/t-$525\/t in respect of neutrals, with bright stock between $530\/t-$595\/t\nFOB.<\/p>\n\n\n\n<p>Black Sea trade\nis also quiet, with little traffic coming out or crossing the sea. The Kavkaz,\nRussia, STS loading is thought to happen on a prompt basis with the 10,000 tons\nparcel sailing for Rotterdam. Demand for this transshipment parcel may be\nwaning, with receivers in the Caribbean facing the coronavirus, which may have\ntemporarily halted traffic coming into that region. The cargo can be stored in Rotterdam until such time\nas demand recovers. Prices are heard between $410\/t-$425\/t in respect of SN500,\nwith smaller quantities of SN150 at around $410\/t. Prices are indications only.<\/p>\n\n\n\n<p>One Group I cargo\nloaded out Greece for Turkish buyers in Derince. Although offers are still made\nto Turkish receivers, there is little interest in taking these larger parcels. They\nmay sit in storage for some time before being utilized in blending operations.\nIndications for Greek cargoes were reduced to $510\/t for quantities of SN150\nwith SN500 at $520\/t basis CIF Marmara. <\/p>\n\n\n\n<p><strong>Middle East<\/strong><\/p>\n\n\n\n<p>One offer is for\na supply of Group II base oils to load out of the Red Sea for receivers in Gebze,\nTurkey. This parcel of 5,000 tons may be re-thought under current\ncircumstances, since gain of the throughput of this cargo may become extremely\nslow due to lack of demand.<\/p>\n\n\n\n<p>The large parcel of Group III grades that loaded out\nof the Middle East Gulf will be arriving into Gebze, Turkey, very shortly. With\ndemand missing, this large parcel may take some time to shift. <\/p>\n\n\n\n<p>Group II and Group III grades are still pushed out\nof tank from Gebze, Turkey, with selling levels maintained between $695\/t-$725\/t\nin respect of the low and high vis Group II grades, with partly-approved Group\nIII base oils between $710\/t-$745\/t. These prices are rumored to be lower now, with\nheavy discounting applied. Sellers are trying to maximize cash flow, perhaps\neven selling a loss just to move material out of tank. <\/p>\n\n\n\n<p>A relatively\nlarge number of vessel enquiries remain for Group I and Group II material to\nload out of Yanbu, and Group I solvent neutrals to load out of Jeddah. However,\ndestinations for these cargoes are in India, United Arab Emirates, and Pakistan,\nwhere the virus situation has escalated suddenly, with India in total lockdown.\nThese parcels may be put on hold until either the situation resolves itself or\nuntil normal working practices are restored in India <\/p>\n\n\n\n<p>Contract\nbusiness with supplies of bright stock going into Egypt will probably go ahead,\nsince by deadline no advice regarding a force majeure call was heard from\nEgyptian General Petroleum Corp. One parcel of 5,000\ntons is due to be loaded towards the end of April.<\/p>\n\n\n\n<p>The coronavirus has\nrestricted much of the trade in Middle East Gulf and U.A.E. in particular,\nalthough an offer was made for a 6,000 tons cargo of Group I neutrals to load\nout of Greece for buyers in U.A.E. This may represent a move to take material\nout of storage in Greece, perhaps due to containment problems, since the prices\nheard were exceptionally low for CFR\/CIF levels into Sharjah. Receivers in the U.A.E.\nare reluctant to commit to further large parcels at the present. Many unknown\nfactors are at work, such as where are base oil prices moving, and more\nimportantly, whether demand picks up in the near future for finished\nlubricants.<\/p>\n\n\n\n<p>People are in lockdown in the\nU.A.E., with business suspended much as in Europe. Sources are working from\nresidences, with offices closed for day-to-day business.&nbsp; <\/p>\n\n\n\n<p>Restrictions are strictly\nenforced on any and all Iranian vessels discharging small quantities of base\noils into Hamriyah in Sharjah. An unusual cargo apparently loaded out of an Iranian\nport during March for receivers in Hazira, in the west coast of India. The\nunusual nature of this cargo was its size, with almost 12,000 tons of Iranian Group\nI grades, SN500 mostly, with some SN150. Prices for this material were\nindicated at around $498\/t CFR in respect of SN500. This would have been\nnegotiated and even loaded prior to the crude slump. Iranian prices are no\nlonger established into U.A.E. because no reported parcels are arriving due to\nthe current situation in both U.A.E. and Iran, where the coronavirus death toll\nis one of the highest in the world.<\/p>\n\n\n\n<p>Group III news concerns a 6,000\ntons cargo sold out of Sitra and moving into Hamriyah. This local trade appears\nto be continuing, although no reported cargoes loaded or moved out of the Middle\nEast Gulf to India and Far East of late. Activity from both Al Ruwais and Sitra\nmay have been suspended for the foreseeable future, due to distributors\navoiding ullage problems in receiving terminals because of the lockdowns and\nlack of a market. <\/p>\n\n\n\n<p>Notional FOB prices are\nmaintained with levels between $545\/t-$585\/t in respect of the partly-approved\nrange of 4 centiStoke and 6 cSt Group III base oils. Eight cSt grades, which\nwould have been sold into India and Far East, will have slightly lower FOB\nprices due to discounted selling prices in those regions. Few, if any, cargoes\nare expected to move during the coming weeks. <\/p>\n\n\n\n<p>\u201cNexbase\u201d-branded Group III\nbase oils from Sitra, marketed by Neste, also remain unaltered, with notional\nnetbacks between $675\/t-$730\/t FOB in respect of 4 centiStoke, 6 cSt, and 8 cSt\nviscosities. <\/p>\n\n\n\n<p>Notional FOB prices on a\nnetback basis are based on prices derived and informally assessed from regional\nselling levels, less marketing, handling and freight costs. <\/p>\n\n\n\n<p>With one offer\nfor a large Group II cargo from South Korea, some 12,000 tons of Group II\ngrades is proposed for receivers in the U.A.E. The potential supplier has real\nproblems in moving material out of the refinery at this time. <\/p>\n\n\n\n<p>Generally, Group\nII base oil supply out of U.A.E. hub storage is very quiet due to the new\nrestrictive practices to combat the virus. Numbers as indications only on an\nFCA basis are between $675\/t-$810\/t in respect of the light vis grades\n100N\/150N\/ 220N, with 500N\/600N between $700\/t-$830\/t. <\/p>\n\n\n\n<p><strong>Africa<\/strong><\/p>\n\n\n\n<p>Cross-Mediterranean\ntrade is dull, with no new reports of material moving from Italian or Spanish Mediterranean\nports into North Africa. <\/p>\n\n\n\n<p>South Africa is\nexperiencing real problems with the onset and spread of the coronavirus, with\nshops and offices closed and people remaining indoors at home. Base oil trade\ncontinues with large cargoes on the high seas for discharge into Durban\nstorage, but perhaps a lull will occur in this trade since South Africa is\ngoing through the same, if not a worse, situation as is happening in Europe.<\/p>\n\n\n\n<p>Covid-19 is now rife\nthroughout West Africa, with receivers in Nigeria in no hurry to look for\nfurther cargoes of base oils to be imported. The current plans for lockdown or\nrestriction of movement in West Africa are not clear, particularly in Nigeria.<\/p>\n\n\n\n<p>Current prices in respect of\nAPI Group I base oils imported into Nigeria will have had lower FOB\nprices, resulting in lower CFR numbers. CFR\/CIF levels are maintained as last\nwith levels indicated between $595\/t-$625\/t. That\u2019s in respect of SN150, SN500\nbetween $600\/t-$640\/t, and bright stock, forming part of the cargo, between\n$710\/t-$730\/t. An Indication in respect of blended SN900 is between $625\/t-$645\/t.<\/p>\n\n\n\n<p>Prices are in\nrespect of cargoes of minimum 10,000 tons being delivered into Apapa port,\nLagos, Nigeria.<\/p>\n\n\n\n<p><em>Ray Masson is director\nof Pumacrown Ltd., a trader and broker of petroleum products in London, U.K.\nContact him directly at&nbsp;<a href=\"mailto:pumacrown@email.com\">pumacrown@email.com<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>EMEA Base Oil Price Report Economies remain paralyzed by the spread of Covid-19 with many employees and their bosses working from home wherever possible. This does not make for a happy scene for the base oi markets where many players are reeling from the potential threats to business, the full effects of which are yet &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/inscx.com\/trading\/2020\/04\/14\/emea-weekly-base-oil-price-report-07-04-20\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;EMEA Weekly Base Oil Price Report 07.04.20&#8221;<\/span><\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-3235","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>EMEA Weekly Base Oil Price Report 07.04.20 - INSCX Live Trading Platform<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/inscx.com\/trading\/2020\/04\/14\/emea-weekly-base-oil-price-report-07-04-20\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"EMEA Weekly Base Oil Price Report 07.04.20 - INSCX Live Trading Platform\" \/>\n<meta property=\"og:description\" content=\"EMEA Base Oil Price Report Economies remain paralyzed by the spread of Covid-19 with many employees and their bosses working from home wherever possible. 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