U.S. Base Oil Price Report


Additional base oil producers announced posted price decreases this week – including Excel Paralubes, ExxonMobil, Calumet, HollyFrontier, Petro-Canada, Paulsboro and Safety-Kleen – following similar initiatives by Motiva and Avista the previous week. The price adjustments were thought to have been triggered by lackluster domestic demand and a need to reactivate orders, given bulging inventories.

Excel Paralubes informed customers that the company would be lowering its API Group II 70N and 110N base oils by 25 cents/gal, its 225N grade by 40 cents/gal and its 600N grade by 35 cents/gal as of April 18.

According to reports, ExxonMobil will be decreasing its API Group I light and mid-viscosity grades by 30 cents/gal, its SN800 (600/650 vis) by 35 cents/gal and its bright stock by 20 cents/gal. The company’s Group II EHC65 will be adjusted down by 30 cents/gal and its Group II+ EHC45 by 20 cents/gal. ExxonMobil will also decrease its Group II+ EHC120 by 20 cents/gal, but this grade is currently not listed on the price table below. The price adjustments take effect on April 20.

Holly Frontier will be decreasing its Group I posted prices on April 21. The company’s Group I 70/75, 100, 150 and 250-vis grades will be lowered by 30 cents/gal, its Group I 525-vis base oil by 35 cents/gal and its bright stock by 20 cents/gal. 

Petro-Canada announced posted price decreases as well. The producer’s Group II 70 and 100-vis grades will be adjusted down by 30 cents/gal; its Group II 200, 300/350 and 600/650-vis base oils by 40 cents/gal. Petro-Canada will also decrease its Group II+ 65-vis by 25 cents/gal and its Group II+ 100-vis by 20 cents/gal. The company’s Group III 4 cSt, 6 cSt and 8 cSt grades will be marked down by 25 cents/gal. All of these adjustments will be effective on April 21.

Calumet also communicated posted price decreases this week. The company will be lowering its Group I 600-vis grade by 35 cents/gal and its bright stock by 20 cents/gal. The company’s Group II 60, 75/80, 100 and 150-vis base oils will be revised down by 30 cents/gal and its 325-vis grade by 40 cents/gal. All of the decreases will go into effect on April 24.

Paulsboro will be decreasing its Group I postings on April 25. The producer’s Group I SN 100-350 grades will be adjusted down by 30 cents/gal; its SN500-850 cuts will be lowered by 35 cents/gal and its bright stock by 20 cents/gal.

Rerefiner Safety-Kleen adjusted down its posted prices late last week. The company lowered its Group II+ RHT120 by 30 cents/gal and its RHT240 by 40 cents/gal. The decreases became effective retroactively on April 12.

Last week, Motiva and Avista had communicated price decreases as well, on the heels of posted price decreases by Chevron and SK Enmove in late March/first week of April.

Motiva communicated a decrease of 30 cents per gallon on its API Group II 105 vis base oil, and 40 cents/gal on its 220-vis and 600-vis grades. The company also lowered its Group II+ 2 cSt and 3 cSt grades by 25 cents/gal and its Group III 4 cSt, 6 cSt and 8 cSt base oils by 25 cents/gal too. All of the decreases went into effect on April 3.

Rerefiner Avista Refining and Trading decreased its Group II+ and Group III base oils by 30 cents/gal, effective April 11.

Chevron had similarly adjusted down its Group II 100R by 30 cents per gallon, and its 220R and 600R grades by 40 cents/gal on March 28.

SK decreased the posted price of its Group III 4 cSt grade by 15 cents/gal and its Group III 6 cSt and 8cSt cuts by 20 cents/gal on April 1. The price of the company’s Group II+ 70N remained unchanged.

In the weeks leading to the posted price decrease initiatives, several paraffinic producers had resorted to granting temporary value allowances or adjustments as a way to induce buyers to take additional volumes. Demand has been lagging compared to levels seen at the same time in previous years. This condition was slightly puzzling as orders typically pick up during the spring cycle because lubricant blenders prepare inventories for the active summer driving and oil change season. It was not clear whether economic uncertainties had caused the slowdown, or whether lubricant manufacturers had built inventories late last year and were still working on clearing existing stocks.

In terms of production, sources said that the prolonged turnaround at Excel Paralubes’ Lake Charles, Louisiana, plant, had been completed. The unit was expected to have resumed operations on April 10, after a two-month turnaround that needed to be extended by two weeks due to technical difficulties encountered during the restart process. The producer was heard to be building inventories and was expected to be unable to offer spot supplies for a few weeks. These details could not be confirmed with the producer directly.

A Group II+/Group III rerefiner was also heard to have performed a brief one-week maintenance program in mid-March.

The Chevron Group II plant in Pascagoula, Mississippi, was getting ready to be taken offline for a turnaround during the second quarter.

Most of April export business has been finalized and suppliers were working on May shipments, with interest for Group I grades noted in Brazil due to production issues at a local refinery. Mexican buyers were also heard to be discussing possible business as inventories were heard to be close to depleted. Buyers were anticipated to return to the market to restock now that U.S. posted prices have decreased.

On the naphthenic base oils front, there were no price changes communicated. Sources said that balanced supply and demand, along with steeper crude oil values were lending support to the current price structure. However, producers were monitoring conditions as requirements for some of the pale oils were sluggish compared to the same time in previous years and this could exert downward price pressure in the coming weeks if inventories started to mount. Export demand was described as healthy and this helped lift some of the pressure on domestic business.

Finished lubricant prices remained exposed to downward pressure on lackluster demand and falling base oil prices. Some manufacturers have granted discounts to encourage buyers to take more volumes. Additive suppliers were also heard to have decreased the price of some products as inventories have increased.

Upstream, crude oil futures were mixed on Tuesday as the U.S. dollar strengthened and investors weighed a potential May interest rate hike by the U.S. Federal Reserve, which may dampen economic activity in the U.S. At the same time, upbeat data about Chinese GDP fanned hopes of higher crude demand from that country.

On April 18, West Texas Intermediate (WTI) May futures settled on the CME at $80.86/barrel, compared to $81.53/bbl on April 11.

Brent futures for June delivery settled on the CME at $84.77/barrel on April 18, from $85.61/bbl on April 11.

Louisiana Light Sweet crude wholesale spot prices were hovering at $83.08/barrel on April 17, from $81.79/bbl on April 10, 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.

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