15 January 2013 21:04 [Source: ICIS news]
HOUSTON (ICIS)--US Group II base oil prices are dropping this week, driven by global oversupply and slow demand in other supply regions, buyers and sellers confirmed on Tuesday.
Motiva led the January price reductions, moving its grades down by 30-38 cents/gal, depending upon the viscosity.
Other Group II base oil producers engaged in a staggered following, with most grades dropping by 30-36 cents/gal, depending upon the viscosity.
Effective dates on the price decreases varied by producer, but all reductions are taking effect between 8 January and 17 January.
Motiva’s 8 January Group II reduction put its 110/120 viscosity base stock price at $3.37/gal and moved its heavy 600 grade price from $4.75/gal to $4.45/gal.
“Global economics are making a difference,” one supplier said.
Slow demand in Asia and Europe have joined with increasing Group II supply in Asia and full supply in the US to push a global oversupply of Group II base stocks.
While US demand is considered to be standard to previous January business, sources said that a main driver for the decreases is to keep arbitrage factors closed between the US and other supply regions.
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