It was another week filled with price cut announcements of 20 to 60 cents per gallon for the full range of API Group I, II, II+ and III base oils. These fresh decreases brought much joy and happiness to buyers across North America, just in time for the year-end holiday celebrations.
Adding to the mix of producers that had previously issued prices decreases, ConocoPhillips, Motiva, Valero and SK told their customers that they would lower all postings by 40 to 60 cents per gallon.
Additionally, Sunoco added to its Dec. 11 revision by dropping all solvent neutrals another 20 cents/gal and cut bright stock by 50 cents/gal, effective Dec. 18. Calumet as well pushed through a price cut of 40 cents/gal on its bright stock posting on Dec. 18, following its Dec. 11 price cuts on neutral grades of 30 to 40 cents/gal.
On Friday, Dec. 19, ConocoPhillips shaved all its Group II posted prices by 50 cents/gal. The company also confirmed that Group II+ and III Ultra-S oils lost 50 cents/gal for all grades. ConocoPhillips markets S-Oils Group II+ and III oils in North America.
On Monday, Dec. 22, Motiva told its customers that Group II Star 3 and 4 postings were marked down by 60 cents/gal, while the prices for Star 6 and 12 shed 50 cents/gal. The Group II+ Star 5+ grade went down 60 cents/gal.
Valero adjusted its Group I and II base oil prices downward by 50 cents/gal, and SK dropped all its prices for Group II+ and III grades by 50 cents/gal, all effective Dec. 22.
On the naphthenic front, Calumet announced that it plans to lower all its pale oil prices by 50 cents/gal on Jan. 2. This adjustment came on the heels of the Ergon and San Joaquin moves reported a week ago. Nynas was expected to follow suit within the next few weeks. Cross Oil stood on its position that it would remain competitive while continuing to evaluate the market going forward.
Apart from the recent spate of price reductions announced since mid-December, spot activity remained a non-event. A handful of suppliers managed to relieve some top-heavy inventories during the past several weeks, selling off a mix of grades via rail car or cargo deliveries. Prices were heard to be steeply discounted, at times more than $1/gal below posted prices. Most regular ongoing and/or contractual shipments are concluded at an average five percent discount to postings, according to consumers.
At the close of the Tuesday, Dec. 23, NYMEX session, light sweet crude futures ended at $38.98 per barrel, a decline of $4.62 from the settlement reported a week ago at $43.60/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.