U.S. Base Oil Price Report

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Base oil producers Chevron, Holly, ConocoPhillips, Valero and SK announced they are upping their U.S. paraffinic postings by 15 cents to 30 cents per gallon this week, while Ergon will raise its naphthenic and paraffinic prices 20 cents to 30 cents/gal early next week.

These hikes follow similar news of posting increases from ExxonMobil and Calumet last week.

Chevron raised postings by 25 cents/gal on its API Group II 100 vis and 220 vis, while pulling up 600 vis by 30 cents/gal, effective Monday, May 10.

Also on May 10 Holly amended its postings by adding 20 cents/gal to its entire Group I lineup of solvent neutrals, from 70 vis through bright stock.

Yesterday, May 11, ConocoPhillips raised its Group II 70, 80, 110 and 225 vis paraffinic grades by 20 cents/gal and upped its 600 by 25 cents/gal. The companys Ultra-S Group II+ oils went up by 20 cents/gal. For the Group III postings, Ultra-S 4 moved higher by 15 cents/gal, and Ultra-S 8 went up 20 cents/gal. ConocoPhillips markets S-Oils Group II+ and III oils in North America.

Valero plans to raise its Group I 100 and 165 solvent neutrals by 20 cents/gal and increase 500, 600 and bright stock by 30 cents/gal effective today, May 12.

Also today, May 12, SK adds 20 cents/gal to its Group II+, III and III+ Yubase base oil postings across-the-board.

Ergon, which does not post prices, plans to increase naphthenics by 20 cents/gal, paraffinic neutrals by 20 cents/gal, and bright stock by 30 cents/gal, all effective Tuesday, May 18. Ergon reports that the turnaround at its 4,800 barrel per day Newell, W. Va., plant is progressing. Base oil units at the plant are scheduled to start up mid-week next week.

Stiff operating costs and low stock positions alongside healthy demand are sited as the main drivers for producers pushing up postings.

According to a number of contract consumers, it is becoming increasingly difficult to source additional supplies, or volumes over and above those prescheduled for May delivery. Meanwhile, base oil producers and sellers are striving to fulfill all contractual obligations, while attempting to satisfy fresh orders from their buyers, within reason.

The supply situation in the pale oil arena is similar, suppliers say. Demand has exceeded expectations in recent weeks, while overall avails have shrunk. Spot price ideas are firm and sellers are not willing to negotiate discounts. In most cases, temporary voluntary allowances (TVAs) have been removed where applicable.

A broad spot range for all grades (60 to 2000-plus) has been pegged from $2.65/gal to $3.35/gal on average. Sources say there have been a few trades concluded at slightly below and slightly above this band, depending on customer status and volumes involved.

On the feedstock front, although crude futures have dropped in value in the last several trade sessions, vacuum gas oil prices continue to firm. Refiners as well as traders say that VGO has gained another few dollars from a week ago, and is now appraised at a premium of $12 per barrel over benchmark crude for low sulfur VGO.

At the close of the Tuesday, May 11, NYMEX session, light sweet crude futures ended the day at $76.37 per barrel, a loss of $6.37 compared to the settlement a week earlier at $82.74/bbl.

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

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