U.S. Base Oil Price Report


Holly, Valero and Calumet stepped out with plans to raise their API Group I and II base stocks between 15 and 20 cents per gallon during the past week. These moves mirror the recently implemented ExxonMobil posted price amendments of the same amounts on June 11.

On Monday, June 14, Holly pushed up its Group I 70, 100 and 148 neutrals by 15 cents per gallon, while increasing its 250, 500 and bright stock grades by 20 cents/gal. The company also said that it is enforcing a 50 percent sales control on its bright stock. The program is expected to remain in place for the foreseeable future and is based on customers six-month historical volumes from November through May.

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Today, June 16, Valero lifted its Group I 100 and 165 vis grades by 15 cents/gal. and pulled its 500, 600 and bright stock postings higher by 20 cents/gal.

Also on June 16, Calumet bolstered only its heavy vis grades. In the Group I category, postings for 700 and bright stock moved by 20 cents/gal. while the Group II 325 vis went up by 20 cents/gal.

American Refining Group and Ergon, which do not post prices, presented plans to raise their Group I line-ups by 15 cents/gal. and 20 cents/gal., also tracking the moves made by ExxonMobil. ARG changes were effective Tuesday, June 15, Ergons on Friday, June 18.

Following up on the ExxonMobil posted price news, its direct buyers clarified that in addition to the Group I price hikes made a week earlier, the company also increased its Group II+ EHC 45 and 60 vis base oils by 20 cents/gal. on June 11.

Sources reiterated how tight overall supply availability remains, and said that they suspect this situation could last throughout the summer months. Although many contract customers are receiving a good portion of their monthly requirements, there are some shortfalls attributed to several sales control programs that are in place, both official and unofficial.

Meanwhile, after the U.S. base oil market has struggled with a number of operating disruptions so far this year, most production sites are now running to scheme. This includes the Calumet Shreveport, La.., refinery that recently experienced a flare issue, causing about a seven-day loss of production. Also, the Motiva Port Arthur, Texas, facility continues to operate at expected rates.

It is also understood that total output of base oils presently is at higher yields than seen earlier in the year. With demand improving in the last two months, producers upped operating rates in efforts to keep up with their customers orders.

However, taking into consideration the aforementioned production set-backs, along with already depleted inventories and the fact that U.S. producers are now preparing for a hurricane season that is expected to be active, stocks will likely remain uncomfortably low, players bemoaned.

Looking upstream, crude values have begun to firm and have risen above the high $60s to low $70s per barrel range, territory that had been sustained for almost a month. But in recent days, futures values have strengthened and have moved north of the mid $70s mark. Energy experts say that crude inventories have shrunk and this could send futures numbers up to the $80/bbl level in coming weeks, if not sooner. They added that crude stocks are not as beefy as seen just some weeks ago, which also indicates that global oil demand has improved causing prices to move higher.

At the close of the Tuesday, June 15, NYMEX session, light sweet crude futures ended the day at $76.94 per barrel, a gain of $4.95 /bbl compared to the settlement one week earlier at $71.99/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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