U.S. Base Oil Price Report


Additional posted price decreases emerged on the heels of Motivas and Chevrons adjustments, with sources reporting this week that Excel Paralubes and ExxonMobil would be reducing postings as well.

Excel Paralubes communicated to its customers that the company would be revising the price of its API Group II Pure Performance base oils on Aug. 15. Posted prices of the producers 70N, 80N and 110N cuts will be adjusted down 6 cents per gallon; its 225N cut will be trimmed by 10 cents/gal; and its 600N grade will be reduced by 20 cents/gal.

Sources noted that ExxonMobil would be decreasing its Group I light and mid-vis grades by 10 cents/gal, while its SN600 will be marked down 20 cents/gal, with no change reported for bright stock. The refiners Group II EHC 65 and Group II+ EHC45 will be reduced 10 cents/gal, all effective Aug. 21.

These movements come on the heels of Motivas 15 to 20 cents/gal downward adjustment on its Group II and III oils – which went into effect Aug. 6 – and Chevrons 10-20 cents/gal reduction, to be implemented Aug. 15.

Chevrons Group II 220R grade will be reduced 10 cents/gal and its 600R base oil 20 cents/gal, while its 100R cut will remain unchanged. This weeks price table has been revised to reflect these changes.

These price reductions were said to have been prompted by softer demand and ample supply, but adjustments at this time of the year are not unusual. A similar price revision took place in late August 2017.

The decrease on the heavier base oil grades was steeper because availability of these cuts seemed to be more plentiful, sources said.

Since there continued to be pressure on base oil producers margins due to the recent climb in raw material costs, there was some hesitation on the remaining suppliers side to follow these adjustments.

On the naphthenic front, Cross Oil will be lifting the price of its pale oils as of Aug. 17. The producers light grades through 750 Saybolt Universal Seconds or SUS will be going up by 20 cents/gal, and all grades above 750 SUS will move up by 15 cents/gal.

While no further announcements emerged from other naphthenic producers this week, it was heard that increases had been implemented on a number of accounts to offset growing feedstock and transportation costs.

Crude oil prices moved up slightly on Tuesday morning, but slipped again later in the day as a report by the American Petroleum Institute revealed a surprise crude oil inventory build of 3.66 million barrels in the United States for the week ending Aug. 1.

There were also reports that Saudi Arabias July crude production had been reduced compared to June, despite earlier assurances that the producer would increase output to balance out supply disruptions in different parts of the world.

The reduction was thought to be in response to lower crude oil demand growth than expected, as OPEC recently revised down its global demand estimates for next year, compared to the previous months report.

On Tuesday, West Texas Intermediate futures settled at $67.04 per barrel on the CME/Nymex, down $2.13/bbl from $69.17/bbl on Aug. 7.

Light Louisiana Sweet crude wholesale spot prices settled at $70.75 per barrel on Monday, compared to $72.14/bbl on Aug. 6, according to the U.S. Energy Information Administration.

Brent was trading at $72.46/bbl on the CME Tuesday, down $2.19/bbl from $74.65/bbl on Aug. 7.

Low sulfur vacuum gas oil was trading at Sep. WTI crude plus $13.50/bbl ($80.70/bbl) and high sulfur VGO at crude plus $12.50/bbl ($79.70/bbl) on Aug. 13. By comparison, low-sulfur VGO was hovering at $82.01/bbl and high-sulfur VGO at 81.26/bbl on Aug. 6, according to data published by PetroChemWire.

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

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