This week – one that would have been fairly quiet otherwise – was stirred with fresh news that two API Group I base oil producers would chop prices. Consumers seemed pleased with the impending lower prices, and a few even considered it a holiday surprise.
ExxonMobil told customers that it planned to decrease its Group I solvent neutrals by 18 cents per gallon and take 28 cents/gal off bright stock. Direct buyers of the major said the reductions will take effect Thursday, Dec. 6.
Paulsboro Refining followed suit, and the company plans to lower its Group I lineup by 18 cents for solvent neutrals, while chopping bright stock by 28 cents/gal. The revised postings will become effective on Tuesday, Dec. 11.
Sources suspected the remaining Group I producers would likely follow this initiative and reduce posted prices in line with the above in the coming week.
Meanwhile, there were no indications that consumers in the Group II/II+/III sectors would be presented with price moves this week.
The market was described as largely quiet this week, although regular contractual business is ongoing with customer orders on target, several producers said. One source said that spot activity is fairly lackluster and has slowed from the more active pace seen during September-November. A handful of suppliers indicated that inventories are somewhat top heavy, although this is what is to be expected for December.
Not all sellers are complaining, however, about ample availability. Sources said there are some suppliers that do not have surplus product and their stock positions are considered much better balanced than compared to some others.
The HollyFrontier turnaround that commenced at the end of October, remains underway, with a start-up expected within the next week.
At the close of the Tuesday, Dec. 4, CME/Nymex session, front month light sweet crude oil futures ended at $88.50/barrel, a modest gain of $1.32/bbl from last weeks settlement at $87.18.
Brent Crude was trading at $109.89/bbl at the end of the day yesterday, slightly up 7 cents/bbl from its week-ago level of $109.82. LLS (Light Louisiana Sweet) crude was trading at a premium of about $21.35/bbl to WTI on Tuesday.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.