Singapore producer cuts base oil prices

Keywords: Singapore, Base Oil,

Singapore, 8 January (Argus) — A Singapore-based base oils producer has cut its ex-tank Singapore prices for most of its Group I and Group II grades. The price cut is its third since the start of last month.

The producer is cutting by $20/t its ex-tank Singapore price for Group I SN 150. It is cutting its SN 500 price by $30/t. It is cutting by $45/t its price of Group II N150 and N500. It is keeping its bright stock price unchanged. The new prices are effective from tomorrow.

The price adjustments reflect the growing weakness of Group II base oils relative to Group I. They widen the discount of Group II N500 to Group I SN 600 to $45/t. This was its widest level in almost four years. The discount of N150 to SN 150 widens to $65/t from $40/t previously. This was its widest level since August 2015.

The price adjustments also reflect the weakness of heavy neutrals relative to light grades. The price cuts push SN 600 to a discount to SN 150 for the first time since October 2014. The SN 600 price weakened steadily relative to SN 150 throughout the second half of 2018 from a $140/t premium to SN 150 last June.

The exception remains bright stock. This price was last adjusted in August. Its premium to SN 600 has widened from $60/t at the time to $120/t now following this latest adjustment.

The repeated price cuts since early December have outpaced sliding Argus Group I and Group II base oil spot prices during the same period. Values have fallen sharply in response to persistent surplus supplies, weak demand and lower crude prices

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