U.S. Base Oil Price Report


Several paraffinic producers announced posted price increases, trailing a couple of suppliers who initiated markups in the previous two weeks. The increases varied in size, depending on the amount of the increases each producer had implemented during the previous round. Cross Oil and Calumet also communicated price increases for naphthenic base oils this week. The adjustments on both camps were fueled by steep crude oil and feedstock costs, tightening vacuum gas oil availability and a snug supply/demand balance.

Effective May 13, Motiva increased the posted price of its API Group II 100N and 600N by 70 cents per gallon and its Group II 220N by 55 cents/gal. The producer also lifted the price of its Group II+ and Group III base oils by 35 cents/gal.

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According to reports, ExxonMobil informed its customers that the company would be increasing its Group I base oils by 20 cents/gal and its Group II/II+ base oils by 30 cents/gal. The increases went into effect on May 17.

HollyFrontier communicated a 20 cents/gal price increase for all viscosities of its Group I base oils, effective May 18.

Petro-Canada Lubricants will also be increasing the postings of its Group II, Group II+ and Group III grades. The company’s Group II base oils will be raised by 65 cents/gal; its Group II+ grades by 35 cents/gal and its Group III grades by 35 cents/gal as well. All of the price changes will go into effect on May 18.

Calumet will move up the postings of all its paraffinic base oils by 20 cents/gal, effective May 19.

Paulsboro will be increasing its Group I prices by 20 cents/gal as of May 20.

SK Lubricants advised customers that the company would raise its Group II+ and Group III posted prices by 30 cents/gal across the board, effective May 23.

On the rerefining front, Avista Oil announced an increase of 30 cents/gal on both its Group II+ and Group III base oils, effective May 17. “The increase is due to changing fundamentals, including: unprecedented cost inflation to source feedstock and producer base oils, coupled with very firm demand and tight inventories,” the company stated.

Just a few days earlier, on May 4, Excel Paralubes raised its Group II 70N and 110N base oils by 15 cents/gal, its 225N cut by 20 cents/gal and its 600N grade by 25 cents/gal.

Chevron lifted the posted price of its Group II 100R and 220R grades by 25 cents/gal and its 600R grade by 30 cents/gal on May 10.

Suppliers explained that the increases were supported by steep crude oil and feedstock costs as the ongoing Russian war on Ukraine continued to impact global crude oil availability and pricing. Furthermore, the United States’ ban on Russian crude oil and refined products which went into effect in April meant that there was less vacuum gas oil entering the country, tightening existing supplies.

Given market uncertainties, buyers preferred to take as much base stock under contract as possible, leading to little spot availability, sources said. Base oil production has also been affected by refiners’ decisions in terms of fuel production versus base oils. With diesel and jet kerosene values skyrocketing, feedstocks were sometimes being prioritized for fuel production. This was placing pressure on the light grades in particular, sources commented. Within the Group I segment, a producer was heard to have little inventory of the light grades due to refinery issues over the last two weeks.

Furthermore, preparations for emergency inventories were underway ahead of the start of the hurricane season in the Atlantic Basin, and buyers sought to secure additional base oil volumes, while suppliers tried to ensure they also had enough stocks to cover potential production outages due to severe weather. The hurricane season spans from June 1 until Nov. 30. “Blenders have been placing extra orders over the last two weeks. They may be getting additional additives, or they are nervous about supply going forward,” a supplier noted.

In terms of exports, Mexican consumers were hoping to secure more product this week, but availability has tightened. A number of buyers had delayed their purchases in hopes of attaining lower prices, but now they were actually facing difficulties in finding material and prices have edged up.

Traders were also heard to be searching the U.S. market for extra barrels to ship to Europe, where conditions were strained and pricing has been moving up steadily over the last few weeks.

On the naphthenic base oils side, Cross Oil increased all of its naphthenic base oils by 25 cents/gal on May 16. “This increase is being driven by market factors including the recent unprecedented increases in crude oil, natural gas, and continued inflationary pressure on other inputs,” the company explained.

This week, Calumet announced that the company will be increasing naphthenic base oils by 30 cents/gal across the board, effective May 24. 

Other producers were monitoring market conditions, as firm crude oil and feedstock costs, along with balanced supply and demand continued to exert upward pressure on pricing. 

South American and European buyers appeared to be on the lookout for pale oils, with U.S. product on their radar, but proving difficult to obtain in sizeable quantities given healthy demand in the domestic market.

Downstream, blenders were starting to see increased availability of additives, since a major producer has boosted its production rates. This should lead to higher manufacturing rates at some blending plants and increased demand for base oils, sources said.

Lubricant, grease and other finished products manufacturers announced price increases of up to 8%-14%, with implementation dates sprinkled between May 27 and July 1. Some of the increases of a previous round intended for April will become effective in May as lubricant deliveries were suffering delays due to the raw material shortages. The price adjustments have been prompted by climbing base oil and other raw material costs, along with heightened transportation, logistics and packaging prices.

Upstream, crude oil futures edged up on Monday on optimism that China would see a marked demand recovery after signs that the country may be over the worst of the pandemic and related lockdowns. However, oil prices slipped later on Tuesday on a lack of consensus among European Union members about imposing a ban on Russian crude oil and natural gas imports. Meanwhile, stockpiles in the U.S. Strategic Petroleum Reserve dropped to their lowest level since 1987.

On May 17, West Texas Intermediate (WTI) June futures settled at $112.40/barrel, compared to $99.76/barrel on May 10.

Brent futures for July delivery settled at $111.93/barrel on the CME on May 17, from $102.46/bbl on May 10.

Louisiana Light Sweet crude wholesale spot prices were hovering at $116.27/barrel on May 16 and had settled at $105.73/bbl on May 9, according to the Energy Information Administration.

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com

Lubes’n’Greases Publications shall not be liable for commercial decisions based on the contents of this report.

Archived base oil price reports can be found through this link: https://www.lubesngreases.com/category/base-stocks/other/base-oil-pricing-report/

Historic and current base oil pricing data are available for purchase in Excel format.