U.S. base oil prices continued rising the past week, this time on the naphthenic side of the market. Pale oil producers announced hikes of 10 cents per gallon to take effect beginning this week. Market sources suggested crude oil costs could push base oils even higher.
The announcements of price increases for naphthenics came a week after the paraffinic side of the market underwent its third round of general hikes since late February. Nynas, Ergon, Cross, San Joaquin Refining, Citgo and Calumet announced that they will raise prices on all naphthenics by 10 cents per gallon. Nynas and Calumet made their increases effective July 5, while the other companies dated theirs to July 1.
For most naphthenic suppliers, this is the third round of hikes since March. As with the previous rounds, producers said this one was spurred by spikes in crude oil costs, which had dipped to less than $50 per barrel in late May. In the past two weeks, crude climbed to new records above $60.
Without a doubt, this is in response to the jump in crude, along with the fact that the paraffinic boys went up, one marketer said.
Several naphthenic producers added that their costs alone justified the latest round of markups even before the latest jump in crude.
We [within the company] were discussing this increase back when crude was in the range of $51 to $52, another marketer said. Now its up around $60, and I think youre going to see additional increases if it stays in that neighborhood. No North American naphthenic producers post prices.
The price of crude on the New York Mercantile Exchange closed yesterday at $58.30, 56 cents lower than a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.