In the past week, price announcements from U.S. producers and marketers Citgo, ConocoPhillips, Flint Hills Resources, Sunoco, SK and Nynas reached the market. Paraffinic increases ranged from 15 to 36 cents per gallon, while pale oils went up 40 to 60 cents per gallon.
Citgo said that it has raised postings on its API Group I paraffinics by 30 cents/gal on 85, 100 and 150 grades. Solvent neutrals 325 and 650 went up by 15 cents/gal, and bright stock rose 20 cents/gal. All the Citgo increases were effective Thursday, May 22.
On Friday, May 23, ConocoPhillips lifted its Group II paraffinic grades by 35 cents/gal on 70N through 110N. The company upped its 225N by 30 cents/gal and boosted 600N by 32 cents/gal. ConocoPhillips also confirmed that Group III Ultra-S oils went up by 15 cents/gal for all grades. ConocoPhillips markets S-Oils Group III oils in North America.
Flint Hills Resources also hiked its Group II base oils on May 23. FHR said that 70HC, 75HC and 230HC rose 35 cents/gal, 100HC added 36 cents/gal, while 600HC climbed 27 cents/gal.
Sunoco plans to hoist its Group I slate today, May 28, by 30 cents/gal on grades 70 through 160 as well as its heavy vis 525. Solvent neutral 250 will bounce higher by 25 cents/gal, and bright stock will increase by 20 cents/gal.
SK said that postings on all of its Yubase-branded Group III stocks will rise 15 cents/gal, effective Thursday, May 29.
Naphthenic supplier Nynas said that its prices will increase between 40 and 60 cents/gal for base oils, process oils, white oils and finished transformer oil. The hikes are effective June 1.
The U.S. base oil industry has been and will most likely continue to be riddled with a repetition of price hikes, at least while crude values hover at record high levels, players indicated. Sources lamented that this stream of increases seems endless.
To recap the recent price initiatives by ExxonMobil, the company led a round of hikes that started on April 22, outlining an across-the-board increase of 20 cents/gal. The major then raised its light ends between 15 and 25 cents on May 9. Most recently, as reported in the last issue of Lube Report, ExxonMobil raised base oils 15 to 30 cents/gal. All other Group I, II, II+ and III producers have participated in raising prices regularly as well during this time frame.
Suppliers said that most integrated refiners continue to favor transportation fuels, such as diesel, jet and gasoline, over base oils, due to better return on the dollar. As a result, there is growing pressure to divert light end viscosity grades, both paraffinic and naphthenic, into fuels. Therefore, base oil producers say, it is imperative to keep pushing for steeper prices.
Meanwhile, compounder blenders and packagers are trying to steady themselves from all the upstream price activity that has hit the market during the last four to five weeks. Not only are base oil prices steadily up, but so are the cost of additives, blenders exclaim. These combined increases have led to another attempt by small and mid-size blenders to raise finished lubricant prices by an estimated $1.20/gal in July. This increase, if successful, will follow an attempted upward price adjustment of around 35 to 40 cents/gal issued for June.
At the close of the Tuesday, May 27, NYMEX session, front-month light sweet crude futures settled at $128.85 per barrel, down 22 cents from the week earlier close at $129.07/bbl.
Carolyn L. Green, based in Houston, can be reached directly at carolynlgreen@gmail.com.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.