U.S. Base Oil Price Report


Supply increased in the United States market as a result of a seasonal decline in demand and fairly steady production rates at most base oil plants. Two plants were undergoing a turnaround – one on the paraffinic side, and one on the naphthenic side – while a third producer was ramping up rates following an extended shutdown, which had led to a tightening of certain grades. The impact of the shutdowns was limited due to lower consumption levels and ample inventories at most suppliers’ facilities.

According to reports, Motiva has taken its API Group II/III unit in Port Arthur, Texas, down for a turnaround concurrently with maintenance work at several of the refinery’s feedstock units. The base oil plant was expected to restart at the end of the month. The producer had built inventories to cover requirements during the outage, but availability of the company’s Group II 600N was heard to be limited at best, although the company’s customers were receiving all the volumes they needed. Other producers’ supply of this grade had been tight in previous weeks, but a return to higher production rates at the producers’ base oil plants has allowed for more product to come into the market.

Get alerts when new Sustainability Blog articles are available.


A second major U.S. Gulf Group I/II producer has ramped up run rates, following an extended turnaround that had started back in June. The producer was heard to have experienced technical issues when it was ready to restart the plant in August and the unit had been running at reduced rates, but production was now close to full rates, according to sources.

Suppliers generally start to offer surplus supplies into the market when the end of the hurricane season approaches, and this has also contributed to a lengthening of supplies. Additionally, buyers become more circumspect in terms of how much product to acquire before the end of the year and try to work down inventories as much as possible.

All of these factors, together with softer crude oil and feedstock values over the last few days, were placing downward pressure on base oil prices. While there have not been any posted price decreases communicated by producers so far this month, spot prices have weakened. Most grades – with the exception of the Group III cuts, Group I bright stock and the Group II 600N cut, which showed tighter conditions – have seen values slip by about 5 cents per gallon from the previous week.

Continuing additive supply issues were also placing a damper of demand of certain base oil grades, particularly those used in automotive applications, sources noted. An additive supplier has recently placed customers on allocation due to a strike and ensuing supply chain disruptions in Europe, where the supplier sources some of its raw materials. Two other additive suppliers have maintained their allocations despite having lifted their force majeures about a month ago.

This situation may also impact Group III demand, although requirements for the 4 cSt grade were still described as healthy, particularly for volumes acquired under contract. A couple of Group III plants in the Middle East and Europe were undergoing turnarounds, but availability of most grades was deemed adequate.

In order to stem the downward price trend in the domestic market and avoid a build-up of inventories, a number of Group I/II producers have started to trim operating rates at their base oil plants or are streaming more feedstocks and light grades into distillates production as fuel prices have strengthened.

Export opportunities have in the past helped keep supply and demand more balanced at home, but high prices in the U.S., together with plentiful base stock supply in other regions have restricted export options. There was only mention of a Group I shipment consisting of several grades having been finalized to Africa. Suppliers from other regions continued to eye the Americas as a destination point for their extra barrels, with around 4,000 metric tons being discussed for shipment from Ulsan, South Korea, to Guayaquil, Ecuador, in November. Similar shipments between Northeast Asia and Latin America have taken place in recent months, but sufficient supply and lower prices at destination, together with limited vessel space on certain routes have dampened business.

Demand for U.S. products in Mexico remained subdued due to economic uncertainties, a stronger dollar – which makes imports more expensive in the local currency – and a slowdown in lubricant segments.

On the naphthenic front, a planned turnaround at Calumet’s base oils plant in Princeton, Louisiana, started earlier this month and was expected to last until the end of October. This turnaround, together with an unexpected plant outage at another supplier’s facility back in August and steady demand, have led to a balanced-to-tight supply and demand scenario.

Upstream, crude oil futures edged up in early trading on Tuesday, boosted by a weaker U.S. dollar and supply issues. However, prospects of lower fuel consumption, together with potential demand destruction in China as the country continues to impose strict COVID-related lockdowns weighed on prices. The Biden administration was also planning to release another 10 to 15 million barrels of crude from the strategic petroleum reserve, Bloomberg reported.

On Oct. 18, West Texas Intermediate (WTI) November futures settled at $82.82/barrel, compared to $89.35/bbl on Oct. 11.

Brent futures for December delivery settled on the CME at $90.03/barrel on Oct. 18, from $94.29/bbl on Oct. 11.

Louisiana Light Sweet crude wholesale spot prices were hovering at $89/barrel on Oct. 17, according to the Energy Information Administration. (There was no trading on Oct. 10 due to the Columbus Day holiday).

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.