The fourth quarter brought not one, but two rounds of price hikes totaling some 20 to 37 cents/per gallon for most base stocks, something that was not expected given fairly mundane supply/demand fundamentals. Also, price adjustments, whether up or down, are not typical during the last quarter of any year.

But 2007 was not a typical year to begin with, and the difference was largely attributed to the steep climbs in crude oil prices. In turn, base oil producers found themselves dealing with fast-building operating costs, which they were compelled to pass through the downstream chain.

Granted, demand was more or less steady (if not a little soft) for most paraffinic and naphthenic grades throughout last year, with only a few blips of eager buying sprees.

But crude values, gaining about $40 per barrel since January 2007, led to a whiplash of price events over the year, mostly increases. There were also some downward movements that surprised a number of players.

In a stunning move in August, ExxonMobil lowered its American Core 100 viscosity (Group I) base stocks by 40 cents per gallon. Sources said this was an out-of-the-ordinary adjustment, but one the company felt it must initiate since the gap between base oil spot prices and postings had widened substantially during the summer months.

Since that posted price decrease however, and particularly since November, producers pushed up prices regularly despite beefy inventory positions and lackluster demand.

Looking forward, consumers are hoping that price stability will prevail at least through the first quarter. Demand is expected to crank up in late February and stay robust through May. Whether this proves to be true is not yet clear, but most suppliers are preparing for an active spring buying season.

Neither buyers nor sellers want a repeat of the price gyration that shook the market in 2007. Rather, both sides are crossing their fingers that there will be few incidents to stir or shake a balanced scenario.