According to sources, ExxonMobil added 5 cents per gallon to all of its U.S. postings, effective today. Other suppliers indicated that they would probably impose their own increases but there was no word of official announcements by the close of business yesterday.

As with the earlier increase, ExxonMobil attributed this weeks markup partly to lingering effects of this winters strike at Petroleos de Venezuela S.A. The strike ended earlier this month but the state-owned oil company, the largest supplier of base oils to Latin America, has yet to resume base oil production. ExxonMobil stated it continues to backfill the supply shortage, sources said.

Sources said ExxonMobil added that base oil supply in the United States is tightening because refiners are diverting vacuum gas oil feedstock from base oils to fuels, where margins have become more attractive recently.

Base oil prices have traditionally been much less volatile than fuel prices. After ExxonMobils announcement yesterday, some base oil buyers noted the rarity of their market enduring consecutive markups so close together.

The timing is certainly an issue, as far as Im concerned, one purchaser grumbled.

But this source and others also said it is hard to debate the rationale of raising prices at this time, given the current market. Even after the previous increases, base oil refining margins remained below historical norms, thanks to the continued upward trend in crude oil costs.

As one supplier said, If [ExxonMobils] margins are anything like ours, its no surprise that theyre raising prices.

Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.