High crude, tight supply boost Asian base oils

18 March 2008 10:37  [Source: ICIS news]

SINGAPORE (ICIS news)--Escalating crude oil prices and snug supply have pushed up Asian base oils prices $20-25/tonne (€12.80-16/tonne) this week, regional sellers and buyers said on Tuesday.

Base oils prices in Singapore rose to $940-980/tonne ex-tank for SN-150 and SN-500 grades of Group I category product after industry major ExxonMobil increased prices effective 15 March.

Some regional producers, such as those in Thailand, had reduced operating rates at their base oils facilities after facing diminished margins and were diverting feedstock vacuum gas-oil for production of the more lucrative gas-oil for the diesel pool.

Gas-oil prices were pegged at $977/tonne on Monday in Asia.

Buyers in the downstream lubricant blending markets, especially in China and India, were resisting rapid price increases and the gap between buy and selling ideas was currently quite big, said a South Korean base oils seller.

Adding to the supply woes was the turbulence in the global currency markets. The rapidly appreciating yen against the US dollar had pushed up selling ideas of Japanese base oil sellers, said a source at a one of Japan’s large refineries.

The yen was at Y97.5 to the dollar on Tuesday, up from Y107 in early February.

($1 = €0.64)

By: Anu Agarwal
+65 6780 4359

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