U.S. Base Oil Price Report


Ergon, Cross Oil, Calumet, and San Joaquin Refining announced price increases for their naphthenic base oils, citing escalating crude oil and production costs as the main drivers for the hike.

Ergon notified its customers that the company would be lifting the price of naphthenic oils in the North American market by 15 cents per gallon, effective Sept. 28. The increase will apply to all viscosities.

Close on Ergon’s heels, Cross Oil communicated a 15 cent/gal increase on all naphthenic products, with an effective date of Oct. 1.

“Several market factors have prompted this increase, which include the following: Overall increases for the procurement of naphthenic crude barrels and extreme increases in transportation costs,” a company source explained.

“There were some rail freight increases back in Q2 that werent passed through until now,” another supplier added.

San Joaquin Refining will be marking up its naphthenic oils by 15 cents/gal, with an effective date of Oct. 3.

Along similar lines, Calumet will be raising its naphthenic oils by 15 cents/gal as of Oct. 4.

Aside from climbing feedstock costs, a couple of producers also mentioned a fairly balanced-to-tight supply and demand scenario as another element lending support to the initiative.

The steeper feedstock values over the last few weeks have also stemmed the fall of spot prices on the paraffinic side, sources noted.

Not only domestic demand has picked up slightly, but requirements from Mexico were described as steady. Buying interest from Brazil, which had been strong a couple of months ago, has declined.

Additionally, some producers were heard to be opting for directing more feedstocks into fuel production instead of base oils as returns may be more favorable, according to sources.

Crude oil futures hit a four-year high as United States sanctions on Iranian crude exports loomed, and OPEC and Russia declined to raise output to help lower oil values.

Numbers eased slightly on Tuesday after U.S. President Donald Trump called on OPEC to increase crude output. Prior to Trump’s remarks, Brent had hit $82.55 per barrel, its highest since Nov. 10, 2014, Reuters reported.

Brent was trading at $81.87/bbl on the CME Tuesday afternoon, and had settled at $79.03/bbl on Sep. 18.

West Texas Intermediate October futures settled at $72.28 per barrel on the CME/Nymex Tuesday, up $2.43 cents per barrel from $69.85/bbl on Sep. 18.

Light Louisiana Sweet crude wholesale spot prices settled at $79.48/bbl on Sep. 17, compared to $76.56/bbl on Sep. 10, according to the U.S. Energy Information Administration.

Low sulfur vacuum gas oil was at Nov. WTI crude plus $17.25/bbl ($89.33/bbl) and high sulfur VGO was at crude plus $15.50/bbl ($87.58/bbl) on Sep. 24. By comparison, low-sulfur VGO was hovering at $87.60/bbl, and high-sulfur VGO at $86.60/bbl on Sep. 18, according to data published by PetroChemWire.

In other base oil market news, Kleen Performance Products has resumed postings of its base oils, with an effective date of Sep. 25. “Kleen Performance Products believes the postings … reflect the quality of our GII+ base oils and our ability to offer a sustainable product,” a company source said.

In addition, Kleen Performance Products offers regional postings due to the location of its four refineries. Aside from its Midwest posting, the company also quotes a West Coast posted price for its Group II+ 120 cut of $4.06/gal, and a Northeast posted price of $3.96/gal. The rerefiner’s Group II+ 220/240 cut was reported at $4.26/gal at its West Coast location, and $4.16/gal at its Northeast location.

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

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