Europe-MidEast-Africa Base Oil Price Report

2012-08-09   来源：润滑油情报网 网友评论 0 条

Crude and gas oil prices have escalated to levels that make the sale of base oils impossible at the lows expressed in recent reports, causing the European market to make an almost united and resolute response to increase prices.

Except for the Middle EastGulf and Eastern and South Africa, the region has faced a no-brainer, with API Group l base oil prices immediately increasing by $50 to $100 per metric ton. Group ll and Group lll prices will undoubtedly follow, but it will take some time before they are adjusted. 

Taking the lead from Baltic distributors, Europe has become bearish in just five days, requiring producers to sell at prices which support their position among petroleum products.

Dated Brent Crude broke $110 per barrel, and was headed to $112 per bbl on Tuesday, taking ICE gas oil front month to renewed highs at $950/t. With this push from feedstock, lower Group l prices cannot be contemplated, which until recently had been the case for certain suppliers.

Producers’ offers are $50 to $70/t higher than perhaps even three days ago, with the impetus now firmly behind price increases. Most offers come with 24-hour validity; such is the sentiment running through the markets.

Group l FOB offers are now at $980 to $1025/t for light solvent neutrals. Heavier grades such as SN 500 range from $985 to $1040/t, with the higher end being heard this week. Bright stock prices rose quickly above heavy neutrals, with current offers between $1050 and $1085/t.

These offers apply to cargo-sized parcels of Group l grades being loaded ex European mainland or North African ports, where availability is confirmed.

European local prices have halted their downward spiral, appearing to have stabilized at $100/t higher than offers confirmed above. There appears to be some overpricing in this market, where expectations last week were prices more in line with bulk cargo sales. This will not happen now, but prices may increase more slowly than the sudden surge experienced by exports.

Baltic and BlackSeas

Russian and Belarus stocks from the Baltics are in short supply, with many sellers unable to confirm prices or supplies until nearer the end of August, when replenishment volumes will arrive from Russian FCA sales. Prices quoted for prompt supply have risen by some $100 from lows reported two weeks ago. Prices of $940/t were heard earlier this week, but that was before gas oil breached that level. Sources now report that the lowest price is $985/t, with others asking in excess of $1000/t for SN 150 and SN 500.

With supplies being limited and this sector of the Group l market going tight, new offers will certainly move higher, which will strengthen mainstream producers within the European mainland.

Black Sea business has also turned the corner with CIF prices into Gebze for SN 150 at $990/t, and with sellers targeting at least $1000/t FOB. Delivered prices into Turkey will increase to $1035 to $1050/t for SN150 and SN500.

Turkish buyers are scurrying to buy what they can from Russia, but with current stocks facing a sell-out, buyers are seeking alternatives. One 9000 ton Group II cargo is being offered to Turkish buyers at very competitive prices for 150N, 200N and 600N. This supply is sourcing from Far East, where other options may lie for imports into this region.

Middle East

With Ramadan, the Middle EastGulf has not been affected in the same way as the European mainland markets. This is partly due to local supply of material from Iran, Saudi Arabia and UAE, and also the effects of the Far East base oil markets, where supply is still outstripping demand, particularly for Group ll grades. The imbalance in the Far East has produced many opportunities for base oil to flow into the Middle EastGulf at competitive rates.

Although Iranian suppliers advertise a large slug of 28000 tons of SN 150, SN 500 and SN 650, they have not completed any significant export sales, due to sanctions and the logistical problems attached to shipping from Iranian ports. Prices for local supplies into UAE for re-selling and local blending are holding steady at $1045 to $1075/t in dollar terms, although these deals are transacted either in local currency or through other ‘alternative commercial arrangements’.

Local blenders in UAE this week said they expected Iranian and other local Group l prices to rise on the back of crude and other petroleum product increases after Ramadan.

With the upswing in European prices, Middle EastGulf arbitrage is closed or rapidly closing. This could mean that other alternative Group l and ll cargoes from the Far East could provide a useful stop-gap without avails flowing from the West.

Africa

East Africa receivers have been shopping for alternate sources of Group l grades, SN 150, SN 500, and BS, since reliance on UAE is dwindling due to the lack of Iranian material. Sources in Singapore note interest in parcels being shipped from the Far East to East Africa, but as of this week no reported deals have been completed.

Prices are still very attractive to sellers in both East and South Africa. And with one main South African player going into turnaround in October, there may be scope for imports. Levels are reported at $1240 to $1290/t for the solvent neutrals, and around $1360/t for bright stock.

West Africa reports are that Nigerian imports have been covered, although more than one receiver stated this week that they are still negotiating a mixed cargo out of the Baltic in addition to another cargo booked some three weeks ago. Comments received from Nigeria suggested that importers were still looking for low prices and did not expect to be paying higher numbers yet.

Sources revealed that traders had declined offers into West Africa due to supply difficulties and uncertainty over pricing. Index-linked prices were being proposed, but receivers looking for fixed-price alternatives declined any fluctuating options.

CFR prices are confirmed at $980 to $1010/t for Baltic loaded SN 150 and SN 500, with SN 900 from the same source at $1035/t. Mainstream supplies are only marginally higher due to the lower freight at $995 to $1025/t for the Group l solvent neutrals, with bright stock at $1125/t.

Group II/III

Group ll prices held this week after the announced Aug. 1 decreases. However, one seller commented that they had withdrawn lower-end prices, and if Group l prices rose steadily for two weeks, then Group ll prices would be amended. Levels remain the same as last week other than the removal of low ends, with light vis grades selling up to $1030/t and higher vis material being sold ex tank up to $1110/t  .

Group lll markets report a similar scene to Group ll, with suggestions that prices would start to rise, in spite of low demand and no apparent shortage of material. Buyers on the other hand maintain that prices should stabilize with the hint that they had been too high, and that recent adjustments had merely aligned them to the base oil portfolio.

Prices were left unchanged, but with a strong suggestion that if Group l levels move upwards, then Group lll levels would move to maintain the hypothetical difference between these grades in the European market. Levels for 4 cSt grades stayed at €1165 to €1175/t, while 6 cSt material was €1210 to €1220/t, all ex tank.