U.S. Base Oil Price Report


The paraffinic market has regained its regular rhythm, following downward price revisions by a majority of producers, while on the naphthenic front, fundamentals appeared to be healthier than on the paraffinic side.

One of the latest price announcements came from Avista Oil. The company reduced the price of its API Group II ESR50 cut by 10 cents per gallon on Aug. 20.

A vast majority of paraffinic suppliers decreased posted prices by 6 to 20 cents per gallon between August 6 and 24, although there were some exceptions as Group I bright stock values were left unchanged, and not all suppliers revised Group III prices either.

While demand for a number of base oil grades has subsided over the last few weeks due to seasonal fluctuations, some grades, such as bright stock, continued to enjoy steady demand and were reported as fairly snug in terms of supply.

The lighter-vis cuts and some heavy-vis oils were heard to be more readily available, and while posted prices have been reduced, spot values have also fallen as suppliers were hoping to encourage more purchases. We are seeing some sellers offering spot price decreases beyond the announced price decrease amounts, a source commented.

In the naphthenic camp, sources noted that buying interest continued to be strong both domestically and for export transactions, with inventories described as tight for all grades.

Cross Oil implemented a price hike on its pale oils earlier in the month due to increases in raw material and transportation costs, but other producers did not officially adjust prices up since crude pricing softened right at the time Cross announced the increase. However, some accounts did see price revisions throughout the month, according to sources.

Naphthenic suppliers were keeping an eye on crude oil numbers, as they have moved up in recent trading sessions, and were once again placing upward pressure on base oil pricing.

Crude oil prices stabilized on Tuesday, pausing after strong gains last week, but losses were limited after a United States-Mexico trade agreement eased concerns about tensions between the two countries, Reuters reported.

Canadas top trade negotiator joined her Mexican and U.S. counterparts in Washington on Tuesday in a bid to remain part of the trilateral North American trade pact.

Another element that supported prices was an OPEC report that showed that producers participating in an agreement to curb supply – which includes non-OPEC member Russia – cut output in July by 9 percent more than the agreed levels.

Traders were also waiting for official industry data to be released on Wednesday, expecting to see a drop in U.S. crude stocks last week.

On Tuesday, West Texas Intermediate (WTI) Sept. futures settled at $68.53 per barrel on the CME/Nymex, up $1.18 per barrel from $67.35/bbl on Aug. 21.

Light Louisiana Sweet crude wholesale spot prices settled at $75.10 per barrel on Monday, Aug. 27, compared to $72.70/bbl on Aug. 20, according to the U.S. Energy Information Administration.

Brent was trading at $75.95/bbl on the CME Tuesday, Aug. 28, up $3.47/bbl from $72.48/bbl on Aug. 21.

Low sulfur vacuum gas oil was at Oct WTI crude plus $14.75/bbl ($83.62/bbl) and high sulfur was at crude plus $13.75/bbl ($82.62/bbl) on Aug. 27. By comparison, low sulfur VGO was hovering at $79.43/bbl and high sulfur VGO at $78.18/bbl on Aug. 20, 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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