Likewise, Petro-Canada marked down its Group II and II+ posted prices on March 9. The producer lowered its Group II 70N and 100N by 40 cents/gal, and its 200N, 350N and 600N by 35 cents/gal. Its Group II+ 65 and 100 grades will be adjusted down by 30 cents/gal.

Avista Oil communicated that the rerefiner had adjusted down its Group II/III base oils by 30 cents/gal on March 2.

Kleen Performance relayed that the rerefiner would be decreasing postings by 30 cents/gal for all Group II+ viscosity grades on March 9, noting that this was a catch-up to the market, and was also in line with what the industry had already communicated to date.

Previously, most Group I/II/II+ and III suppliers, with the exception of a handful in the Group III segment, had decreased postings between 30 to 40 cents/gal, in the March 1-10 interlude.

On the naphthenic base oil front, Ergon announced a decrease in pricing in the North American market of 25 cents/gal, effective March 13. The decrease will apply to all viscosities.

Calumet will also be decreasing its naphthenic oils by 25 cents/gal, with an effective date of March 17. The decrease applies to all grades.

Other pale oil suppliers were heard to be evaluating market conditions and considering how to proceed in view of the latest developments.

The downward price revisions were said to have been triggered by plummeting crude oil and feedstock prices, and prospects of lengthening supply on the back of softer demand due to the effects on the industry of the coronavirus (or Covid-19) pandemic.

In the case of the naphthenic base oils, supply may see a slight tightening as Ergon was expected to have started a month-long turnaround at its plant in Vicksburg, Mississippi, on March 5. The company was heard to have restricted spot sales to be able to build inventory and meet contractual obligations during the shutdown.

With a growing number of Covid-19 cases reported in the United States, which had so far seen only a relatively limited impact of the outbreak, local governments started to implement self-quarantine measures, closed schools and universities, and recommended that employers allow staff to work from home to reduce the spread of the virus. This resulted in a reduced need for people to drive and/or commute, bringing down demand for automotive fuel and lubricants.

Additionally, a number of manufacturing facilities were dealing with shortages of parts and components because of dwindling output levels in China, where many of these products originate. As the coronavirus situation in China improves, plants were heard to be gradually resuming production, which should allow overseas facilities to pick up manufacturing activities as well. For the time being, though, the reduced operating rates at many facilities ensued in reduced lubricant requirements.

The most significant impact of the Covid-19 outbreak yet was felt in Wall Street and crude trading platforms earlier this week. The worst one-day decline in U.S. stocks since the 2008 financial crisis jolted markets on Monday, with the Dow dropping nearly 8 percent.

Stocks bounced back on Tuesday after the White House indicated it would propose a payroll tax cut to ease the burden from the coronavirus fallout, CNN.com reported.

Crude oil futures also collapsed on Mondayafter Saudi Arabia shocked the market by launching a price war against onetime ally Russia, as the country refused to extend production curbs. Pessimistic economic data related to the spread of the coronavirus also weighed on numbers.

West Texas Intermediate prices crashed as much as 34 percent to afour-yearlow of $27.34 per barrel as traders braced for Saudi Arabia to flood the market with crude in a bid to recapture market share, the CNN.com article said.

On Tuesday, March 10, WTI futures settled at $34.36/bbl on the CME/Nymex, and had closed at $47.18/bbl on March 3.

Brent futures for May delivery were reported at $37.22/bbl on the CME on March 10, from $51.86/bbl for April futures on March 3.

Light Louisiana Sweet crude wholesale spot prices settled at $33.80/bbl on March 9 and had closed at $54.61/bbl on Feb. 24, according to the Energy Information Administration.

Low sulfur vacuum gas oil and high sulfur VGO were trading at April WTI plus $12/bbl (or $46.36/bbl) on Tuesday, March 10, and were trading at $58.33/bbl on March 3, according to OPIS PetroChemWire assessments.

Lubes’n’Greases Publications shall not be liable for commercial decisions based on the contents of this report.

Historic and current base oil pricing data are available for purchase in Excel format.