Group I base oil ex-tank UAE prices spike on tight supply

SINGAPORE (ICIS)–Group I base oil ex-tank prices in UAE edged up sharply during the week, buoyed by curtailed import availability as well as ex-tank front supply, market sources said on Thursday.

Import offers for Iranian SN150 and SN500 lots to UAE were largely absent during the week, on the back of a lack of availability for March, market sources said.

Arrivals into the key UAE market also remained curtailed following scant arrivals through February as most Iranian suppliers had previously sold out their allocation for the month in January itself, market sources said.

A lack of incoming material from Iran coupled with curtailed ex-tank availability prompted traders to target higher values in the domestic markets, market sources said.

Deals for Iranian SN150 material were undertaken at $605-635/tonne ex-tank, up $25/tonne from prices seen in the previous week, market sources said.

Offers for the grade ranged at $615-640/tonne ex-tank during the week, tracking prices quoted by regional traders for Iranian material, market sources said.

Prices of SN500 netted a steeper hike, following tight supply as well as traditionally stronger demand for the grade as compared with that for SN150, sources said.

Offers and deals rose to $700-705/tonne ex-tank for Iranian product, as trader holding volumes attempted to hike prices in the backdrop of a lack of incoming material, market sources said.

Looking ahead, buyers deemed these higher values unlikely to prevail in the near-term.

According to buyer sources, lower import costs involved in the purchase of these cargoes coupled with softer crude values during the week amidst unchanged downstream demand deemed higher ex-tank values less likely to sustain in the weeks to come.