Excel Paralubes lifted the price of its Group II Pure Performance® base oils by 15 cents per gallon, also effective June 22.

Phillips 66 has also raised the price of its Group II+ and Group III Ultra-S® base oils by 15 cents/gal as of June 22.

Avista Oil increased its Group II grade by 15 cents/gal on June 22 as well.

HollyFrontier communicated a price increase of 15 cents/gal for all of its Group I base oils, with an effective date of June 24.

Likewise, Petro-Canada’s Group II, Group II+ and Group III base oil prices will be increased by 15 cents/gal on June 24.

Safety-Kleen will be increasing its Group II+ posted prices by 15 cents/gal, effective June 24 as well.

Paulsboro intends to increase its Group I base oil prices by 15 cents/gal, with an effective date of June 29.

SK Americas also plans to increase its Group II+ and Group III base oils by 15 cents/gal on July 1. The Price Table below will reflect these increases next week, which is when the adjustments are scheduled to become effective.

Early last week, Motiva had initiated the round of price increases by lifting its Group II and III base oil postings by 15 cents/gal on June 15.

Chevron also marked up the price of its Group II 100R by 16 cents/gal and its 220R and 600R grades by 15 cents/gal on June 17.

It was also reported that ExxonMobil would be raising its Group I, II and II+ prices by 15 cents/gal across the board on June 24. The price table below reflects those changes as they go into effect this week.

The increases were prompted by a tightening supply and demand scenario, as manufacturers in downstream industries resume activities following pandemic-related lockdowns. Steeper crude oil and feedstock values over the last month also contributed to the upward pressure on base oil pricing. Several producers had also granted temporary voluntary allowances or value adjustments into select accounts a few weeks ago, and these were expected to be removed at the end of the month.

The naphthenic side of the business was also more balanced, although pale oils were deemed ample to cover the current call for product. Prices were heard to have stabilized and were exposed to upward pressure on account of the higher feedstock prices and squeezed margins.

Calumet was expected to restart its plant in Princeton, Louisiana, late last week following a routine turnaround that lasted about two weeks. The producer had been able to meet its contractual obligations during the outage and no shortages were noted. The restart of the plant was expected to allow for more material to come to the market.

A number of paraffinic and naphthenic producers have started to ramp up operating rates at base oil plants, although a majority was heard to be running at around 70 percent, but a couple of plants were reported at 80 percent capacity, according to sources. Some suppliers were heard to be sold out through June as buyers rushed to place orders ahead of the increase implementation.

One of the segments that is critical to the market recovery is the automotive segment. A majority of U.S. auto plants had halted operations to help prevent the spread of the coronavirus, but manufacturing has resumed at most facilities where significant changes were made to ensure the employees’ safety.

However, car manufacturers continued to deal with many uncertainties associated with the pandemic. “The risk of an infection picked up outside a plant spreading along assembly lines remains a prime concern. An outbreak could shut down a factory costing a manufacturer millions of dollars a day,” Reuters reported on June 18.

At Ford Motor Co.’s F-series pickup truck plant in Louisville, Kentucky, the company has granted more than 1,000 workers leave related to Covid-19 concerns. It hired temporary workers to fill their jobs as the plant accelerates production of trucks critical to Ford’s financial recovery. Demand for pickup trucks helped boost U.S. auto sales in May, and contributed to stronger than expected overall U.S. retail sales for the month, the Reuters article added.

Despite a few hiccups, as car and tire manufacturers and other auto-related industries returned to business, finished lubricant sales have picked up the pace, although they have not attained pre-pandemic levels yet. “The markets are starting to come back but, still much below average,” a source noted. It was not clear whether finished lubricant and additives producers were considering price adjustments at this time, as market fundamentals were still vulnerable.

A surge in new coronavirus infections in many states was also imbuing future plans with uncertainty, as new lockdown measures might be reinstated, limiting the population’s movements and driving. This had initially led to a sharp drop in lubricant and gasoline demand during the first string of lockdowns.

An element that has contributed to a more balanced supply/demand scene in the U.S. was that several cargoes totaling over 60,000 metric tons were getting ready to be exported to Mexico, India, the Middle East and various ports in South America and Africa.

However, there were reports that Group II exports to India may face some roadblocks as cargoes from South Korea, Taiwan and Singapore were being offered at more competitive levels, particularly after U.S. producers implemented the 15 cents/gal hikes, sources said. Nevertheless, Indian demand was expected to see a revival as import volumes had plummeted in May, falling to their lowest levels in five years. Group II imports from Taiwan have also declined as Taiwanese producer Formosa Petrochemical was preparing for a turnaround and was restricting its spot availability.

Demand from Mexico for light grades used for diesel blending has seen a steady rise, with prices at Brownsville, Texas, said to be edging up.

Upstream, crude oil futures continued to move up, with West Texas Intermediate touching levels above $40 per barrel for the first time since March on a growing sense of optimism and tighter supplies from major producers. However, uncertainties lingered as a worldwide rise in new coronavirus infections might hamper a fuel demand recovery.

On Tuesday, June 23, August WTI futures settled at $40.37 per barrel on the CME/Nymex, and had closed $38.38/bbl for July futures on June 16.

Brent futures for August delivery closed at $42.63/bbl on the CME on June 23, from $40.96/bbl on June 16.

Light Louisiana Sweet crude wholesale spot prices settled at $41.10/bbl on June 22 and had closed at $38.22/bbl on June 15, according to the Energy Information Administration.

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.