Chevron posted a fresh paraffinic posted price increase less than a month after a previous hike, while Calumet and Cross Oil followed Ergons lead and raised naphthenic prices as well.
Chevron communicated that it was adjusting up posted prices for its API Group II 100, 220 and 600-vis base oils by 20 cents per gallon, effective May 25. The producer most recently increased prices on April 27.
The increases were thought to be driven by a tight supply scenario, healthy demand, and firming crude oil values.
There continued to be rumblings about possible production issues at the Excel Paralubes plant in Westlake, La., which can produce 22,200 barrels per day of Group II base oils. The plants production is jointly marketed by Phillips 66 and Flint Hills Resources.
Sources said the plant may be taken off-line in June, but this could not be confirmed with the suppliers directly by press time.
A Group II supplier was heard to have no spot material to offer, while a second producer has sold large volumes to Asia and reported a balanced-to-tight supply position.
Consequently, spot prices have edged up in recent weeks and selling ideas for June shipments are being discussed at steeper levels.
On the naphthenic side of the market, Calumet raised prices on naphthenic oils on May 24, with all grades of 750 viscosity and lighter moving up by 15 cents per gallon, and grades heavier than 750 increasing 20 cents/gallon.
In a similar fashion, Cross Oil communicated that it would be lifting all naphthenic base oils up to 750 SUS (Saybolt Universal Seconds) by 15 cents/gal, while all products over 750 SUS would increase 20 cents/gal on May 25.
On May 20, Ergon had implemented an increase of 15 cents/gal for its light to mid-vis naphthenic oils and 20 cents/gal for its heavy grades on a majority of accounts.
In related market news, global bright stock demand continues to be healthy at around 53,000 barrels per day, while production is declining due to Group I plant rationalizations, Timothy Langlais, global technical marketing manager for specialty base oils at Ergon Refining, noted at the 10th ICIS Base Oils and Lubricants Conference in Singapore last week.
As a result, and given that bright stock is difficult to replace, price premiums continue to edge up.
Ergon is expected to start production of a new Group I bright stock at its Vicksburg, Miss., naphthenic base oil plant in the third quarter. The producer utilizes advanced refining technology that recovers heavy paraffinic molecules found in naphthenic crude to produce a bright stock that offers similar characteristics as conventional Group I product, Langlais explained.
The enhancements made to the hydrotreaters were anticipated to be complete and operational by mid-2016. Production capacity of bright stock will approximately be 3,000 barrels per day (150,000 metric tons/year).
Upstream, crude oil prices started the week on a weaker note as concerns about major supply disruptions in Canada, Nigeria and Venezuela subsided, and the market shifted its focus from the supply disruptions to the global supply outlook.
West Texas Intermediate futures settled on the CME/Nymex at $48.62 per barrel on May 24, up 31 cents per bbl from the May 17 settlement of $48.31 per bbl.
Light Louisiana Sweet wholesale spot prices closed at $50.20 per bbl on May 23, compared to $49.75 per bbl. on May 16, according to data from the U.S. Energy Information Administration.
Brent was trading at $48.61 per bbl on the CME on May 24, down 67 cents per bbl from $49.28 per bbl a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.