OUR OBSERVATION
Hello, oil aficionados! As the holiday lights flicker and the year winds down, let’s cruise through the latest waves in the base oil markets across the globe. Whether you are crunching numbers by the fireplace or strategizing for 2025, this edition will keep things smooth, insightful, and easy to digest.
Market Overview – Holding Steady with a Few Twists
December’s base oil landscape painted a picture of stability, albeit with slight price dips here and there. The market slowdown ahead of the holiday season played a key role, as players kept inventories lean and transactions light.
In the US market, spot discussions were minimal, and market activity cooled as suppliers held back larger volumes. This calm allowed prices to remain largely unchanged. Meanwhile, in Europe, a reduction in imports balanced weaker demand, keeping pricing relatively stable.
Across Asia-Pacific, the seasonal slowdown tightened its grip, leading to minimal bulk offers. However, Group I shortages eased, thanks to recent supplies from Thailand, Japan, and
Indonesia.
Regional Breakdown – What’s Moving and What’s Not
US
• No surprises here – US Group I and II prices held firm.
• Naphthenics showed slight softening, with pale oils down by $5-9/t.
Europe
• Group I export prices stayed stable, while Group II N100 slipped
• Group III saw some downward adjustments, reflecting a quieter European market.
Looking Ahead – Trends to Watch
As we step into 2025, several themes will shape the market:
• With suppliers cautious on stock levels, expect is some vis grades possible supply chain
tightness to re-emerge early next year as refiners work to balance barrel production
output.
• Blender Behavior – In Asia and India, reliance on domestic supply will persist, influencing price stability.
• Geopolitics & Trade – Global economic conditions and evolving refinery capacities will dictate pricing trends.
• Looking ahead, a major GII refiner is scheduled for a turnaround in Q1 2025, which could temporarily reduce GII availability. However, with steady imports, the impact on the U.S. market remains uncertain.
December may be quiet, but do not let the calm fool you – the new year promises plenty of movement. Stay tuned, stay sharp, and enjoy the holidays!
RECENT HEADLINES
U.S. REFINERIES
Global diesel prices to rely on refinery closures for support in 2025
LONDON/NEW YORK/SINGAPORE, Dec 12 (Reuters) – The global diesel market will likely find price support in 2025 from the closure of about 1% of refining capacity, traders and analysts said, offsetting current weakness and structural downward pressure as the world shifts to cleaner fuels.
The market ends 2024 on shaky ground, despite peak seasonal demand, as margins in the world’s key energy hubs in Singapore, northwest Europe and the U.S. Gulf have come off November’s firm levels as some refineries returned from maintenance shutdowns. Continue Reading Here
With Citgo share auction in shambles, US court readies plan to start over
HOUSTON, Nov 27 (Reuters) – An auction of shares in a Citgo Petroleum (PDVSAC.UL) parent to pay claims against Venezuela needs to be overhauled, a court adviser recommended on Tuesday, conceding a year-long sale process was in shambles and needed to start fresh.
U.S. District Court in Delaware is auctioning shares in PDV Holding to repay $21.3 billion in claims against Venezuela and state-oil firm PDVSA for expropriations and debt defaults. Continue Reading Here
U.S. oil giant’s CEO is a fan of this nuclear energy technology and thinks there could be a role ‘for a company like ours’
Chevron CEO Mike Wirth sees promise in small modular nuclear reactors, which have become popular in the tech sector recently, and signaled openness to getting involved more directly. Continue Reading Here
NON U.S. REFINERIES
China’s oil consumption to peak by 2027, says top refiner Sinopec
BEIJING, Dec 19 (Reuters) – China’s oil consumption is set to peak by 2027, state refining giant Sinopec said on Thursday, as diesel and gasoline demand weaken in the world’s biggest oil importer, a slowdown that has rattled global oil markets this year.
The 2027 peak will top out at no more than 800 million metric tons, or 16 million barrels per day of crude oil, Sinopec said. Last year, Sinopec forecast peak China oil demand, also at 800 million tons, around the middle of 2026-2030. Continue Reading Here
Putin Green-Lights Sales of Rosneft’s Shares
Russian President Vladimir Putin will allow transactions to proceed relating to the shares of state-controlled oil producer Rosneft, lifting an earlier ban imposed in 2022.
A decree signed by Putin on Dec. 20 grants the right to “directly or indirectly establish, change, cease or encumber ownership rights, usage and disposal of shares” in Rosneft and entities controlled by the oil major. Continue Reading Here
Russia’s Lukoil plans to appraise Mexican offshore discovery in 2025
Russian oil and gas giant Lukoil will begin appraisal of a major oil discovery in block 12 in shallow waters off Mexico’s Tabasco state.
Lukoil discovered an estimated 250mn barrels at the Yoti West structure in the block in 2021. The company originally planned to appraise the discovery by drilling a delineation well in 2024.
Citing a lack of drilling equipment, in November the company requested an extension to its appraisal program from Mexico’s hydrocarbons regulator CNH, which approved the revised work program on December 13. Continue Reading Here
THE CRUDE SIDE
Oil drops as dour economic outlook adds to oversupply concerns
NEW YORK, Dec 19 (Reuters) – Oil prices fell on Thursday after central bankers in the U.S. and Europe signaled caution over further easing of monetary policy, fanning concerns that weak economic activity could dent demand for oil next year.
Brent crude futures fell by 51 cents, or 0.7%, to settle at $72.88 a barrel.
U.S. West Texas Intermediate crude futures for January delivery fell 67 cents, or 1%, to $69.91 per barrel and expired on settlement. The more active WTI February contract fell 64 cents to settle at $69.38 per barrel. Continue Reading Here
Russia Loses Indian Oil Market Share to Middle East’s Exporters
India imported lower volumes of Russian crude oil in November while it boosted purchases of Middle Eastern crude, as Russia exported lower volumes overall while some Indian refiners were undergoing maintenance.
In the months prior to November, India continued to boost crude imports from Russia. Over the past two years, India has become a key buyer of Russia’s oil, while the attractiveness of cheaper crude supply has made Russia the single biggest supplier of oil to India. Continue Reading Here
FUN FACT
Oil: The Ancient Wonder Fuel
Long before oil became the lifeblood of modern industry, ancient civilizations were already tapping into its potential. Thousands of years ago, long before anyone dreamed of drilling rigs or offshore platforms, crude oil naturally seeped from the earth, and clever humans found fascinating ways to use it.
The Babylonians and ancient Egyptians were among the first to recognize its value. They used asphalt—a form of naturally occurring petroleum—as an adhesive and waterproofing agent. Need to keep a building safe from water damage? Smear some sticky black stuff on it! The Egyptians even utilized oil in their mummification process, preserving bodies with the help of this mysterious substance oozing from the earth.
In ancient Persia, oil seeps were seen as magical or divine. Zoroastrian priests would light these seeps on fire during ceremonies, creating what were likely the world’s first “eternal flames.” Imagine the awe of watching fire sprout from the ground—talk about a crowd-pleaser!
Not to be left out, the Chinese were early adopters too. By the 4th century AD, they had developed bamboo pipelines to transport crude oil. Their primary use? Lighting lamps and, believe it or not, making salt by boiling brine.
So, while we may associate oil with modern convenience and industrial might, humanity’s relationship with this sticky black substance has ancient roots. Long before it fueled cars or powered factories, oil was already solving problems, sparking curiosity, and even lighting up rituals. Who knew the ancients were such savvy petroleum pioneers?
SUGGESTED READING
The Quest: Energy, Security, and the Remaking of the Modern World
The Quest presents a gripping account of the ongoing quest for the energy that our world needs. Daniel Yergin continues the story of oil begun in The Prize, and brings the reader into the turbulent choices about the future of energy.
The Quest offers context and insight into what it takes to fuel life in the twenty-first century, the struggles among nations, the energies on which our society has been built, and the new resources that are competing to replace them. Essential for anyone An essential book for anyone seeking to understand today’s energy world and the future of energy – and the people who will shape it.
WE’VE COME A LONG WAY!
The Signal Fluid Solutions team would like to take this time to thank you for your business and thank you for allowing us to be an important part of you supply team.
