U.S. Base Oil Price Report


Motiva stepped out with a posted price increase, and was quickly followed by a number of suppliers, including Excel Paralubes, Chevron, Kleen Performance Productsand Avista Oil. On the naphthenic front, Cross Oil and Ergon also announced markups.

On March 14, Motiva raised all of its API Group II STAR product postings by 10 cents per gallon, and its Group III postings by 5 cents/gal.

Avista Oil implemented a 15 cents/gal increase on its Group II base oil and 10 cents/gal on its Group III grade on March 18.

Chevron lifted its Group II 100R, 220R and 600R base oils by 20 cents/gal., effective March 19, to reflect current market conditions, a company source explained.

Kleen Performance Products increased its Group II+ posted prices by 10 cents/gal due to market conditions, with this pricing becoming effective on shipments starting March 19, a company source said. The companys West Coast postings have therefore moved up to $3.96/gal for the 120 vis cut, and $4.16/gal for the 220/240 vis cut; the Midwest postings are $3.81/gal and $4.01/gal respectively, and the Northeast postings are $3.76/gal and $4.06/gal.

Excel Paralubes will be lifting all of its Group II Pure Performance posted prices by 25 cents/gal, effective March 22.

Market sources noted that the increases had been prompted by climbing crude oil and vacuum gas oil values, and supported by strengthening demand.

Participants also said that domestic requirements have grown over the last few days, but activity has been slightly dampened by snow and cold temperatures in the Midwest and Northeast of the United States. Sources characterized orders as steady, but not robust.

On the naphthenic side of the business, Cross Oil communicated that the company would be increasing the prices on low viscosity naphthenic base oils ranging in viscosity from 30 SUS to 300 SUS by 15 cents per gallon. High viscosity naphthenic base oils ranging in viscosity from 500 SUS to 3500 SUS would increase by 10 cents per gallon, all effective March 22. Market factors such an increase in the cost of crude oil and rail transportation prompted the price adjustments, the company noted.

Ergon announced an increase in pricing of naphthenic oils in the North American market of 15 cents per gallon, effective March 25. The increase will apply to all viscosities.

In terms of exports, transportation by barge and tanker had been affected by thick fog a couple of weeks ago, while rail car movements had been delayed by heavy rain, resulting in a backup of product in Brownsville, Texas. However, the issues appear to have been resolved and transportation to Mexico was returning to normal, sources said.

In other market news, a fire that broke out at ExxonMobils refinery in Baytown, Texas, last Saturday, was quickly extinguished. There were no injuries reported and officials are still investigating the cause of the fire, which started at a furnace in a gasoline hydrotreater, according to local media reports. The Baytown refinery, which can process 560,500 barrels a day of crude oil and houses a 28,000 b/d Group I and II base oil unit was heard to be conducting maintenance on its largest crude unit, and the turnaround was expected to last until the end of March, according to sources. Market participants said the turnaround was impacting the production of feedstocks for the companys base oil unit, but no product shortages were noted.

A second fire was reported in Texas on Sunday. The fire started at Intercontinental Terminals Company in Deer Park, Texas, on Sunday morning and continued to burn into the night. Harris County officials said the fire started at the terminal that stores petrochemical liquids and gases, including fuel oil and bunker oil. Market sources said that some of the products in storage might have been base oils and lubricants since the facilities are part of a large distribution center, but further details were not forthcoming.

In crude oil news, oil futures slipped on Thursday and hovered near $59 per barrel, having reached a new 2019 high on Tuesday. Prices were boosted by United States sanctions against oil producers Iran and Venezuela, and by a tacit extension of OPEC production cuts since the organizations meeting scheduled for April has been postponed until June. Gains were capped by rising U.S. output and prospects of a global economic slowdown.

On March 19, West Texas Intermediate April futures settled at $59.03 per barrel on the CME/Nymex, up $2.16/bbl from $56.87/bbl on March 12.

Brent futures for May delivery closed at $67.61/bbl on the CME on March 19, and had settled at $66.67/bbl on March 12.

Light Louisiana Sweet crude wholesale spot prices settled at $67.09/bbl on March 18, compared to $65.09/bbl on March 11, according to the Energy Information Administration.

Low sulfur and high sulfur vacuum gas oil were each at April WTI plus $15/bbl ($74.09/bbl) on March 18. By comparison, low sulfur VGO and high sulfur VGO were both hovering at $71.29/bbl on March 11, 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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