U.S. Base Oil Price Report


Reports emerged this week that Motiva had increased prices. Avista moved up its API Group III posting as well, after adjusting its Group II grade a few days ago, and Paulsboros hikes will become effective this week, too.

According to sources, Motiva increased its Group II STAR 4 and 6 base oils by 12 cents per gallon, but left its heavy-viscosity STAR 12 grade intact. The producer also raised its Group III STAR 4+ (4 centiStokes) and STAR 6+ (6 cSt) by 12 cents/gal, with all of the increases becoming effective May 14.

Avista Oil communicated that it would be lifting its Group III 4 cSt grade by 12 cents/gal on May 21. The rerefiners Group II cut had been marked up 20 cents/gal on May 7.

Paulsboro Refining will be lifting its Group I postings on May 17. The producers VP 100/165 cuts will go up by 15 cents/gal and its VP 500, 700 and bright stock will edge up by 10 cents/gal. While the producer communicated the hikes last week, posted prices will be revised this week because of their effective date.

All of these price hikes follow a string of increases by paraffinic and naphthenic base oil suppliers, who were hoping to recoup margins as the costs of crude oil and raw materials continue to escalate.

There were differing opinions regarding supply and demand factors in the paraffinic segment this week. Some participants noted that requirements had slowed down slightly, following the recent round of increases, with certain grades becoming more readily available. This appeared to apply to the heavy-viscosity grades in particular, and as a result, most suppliers have either increased their postings by a lower amount than for the other grades, or have left heavy-vis prices unchanged.

On the other hand, some sellers saw no changes in demand patterns and deemed the current orders on par with expectations for the month of May.

Rerefiners have seen healthy activity in their segment, with availability described as tight. I think this supply tightness is across the board for all rerefiners because our materials are perfect for 5W passenger car motor oils, a rerefiner explained.

Naphthenic base oil suppliers also expressed satisfaction with the current call for product and the recent implementation of a 20-cent/gal increase, noting that the transformer oil segment had been particularly strong in recent weeks.

Prices on both the naphthenic and paraffinic sides of the market remained exposed to upward pressure due to the sustained climb in crude oil and feedstock values.

Crude futures continued on an upward trek, with Brent hitting a new high of over $79 per barrel on Tuesday on the back of increased demand in key markets such as China. OPECs Monthly Oil Market Report showing that global oil inventories have declined substantially also boosted sentiment. The pending U.S. sanctions against Iran contributed to the stronger prices as well.

West Texas Intermediate futures settled at $71.31 per barrel on the CME/Nymex on Tuesday, May 15, up $2.25/bbl from $69.06/bbl on May 8.

Light Louisiana Sweet crude wholesale spot prices settled at $75.16 per barrel on May 14, compared to $74.19/bbl on May 7, according to the U.S. Energy Information Administration.

Brent settled at $78.43/bbl on the CME on May 15, up $3.58/bbl from $74.85/bbl on May 8.

Low sulfur vacuum gas oil was at June WTI crude plus $10.50/bbl ($81.46/bbl) and high sulfur VGO was at crude plus $10/bbl ($80.96/bbl) on May 14. By comparison, low sulfur VGO was hovering at $81.73/bbl and high sulfur VGO at $81.48/bbl on May 7, according to data published by PetroChemWire.

Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.

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