Paraffinic posted prices are unchanged, and yet another week has passed without an increase attempt from API Group II producers. On the naphthenic side, Ergon announced an increase of 20 cents per gallon.
Ergon informed its customers that it would raise its naphthenic 60 SUS base stock by 20 cents/gal on Thursday, July 15.
Other naphthenic producers have not moved prices in about two months. But as demand continues to pick up strength, pale oil suppliers agree that a full round of increases is possible in coming weeks based on current market dynamics.
There has been an uptick in offshore demand in recent weeks, sellers claim. They add that with domestic activity somewhat thin due to summer vacations, fresh export shipments are taking up that slack and are keeping overall supply availability in the U.S balanced to tight.
Sources suggest that higher prices in both the paraffinic and naphthenic sectors could easily be supported by strong demand alongside limited supply rather than feedstock cost factors.
However, crude prices have been climbing over the past week, and if futures go much higher and pull up vacuum gas oil values, then a wide-spread price increase would not be far-fetched, players hinted.
On Tuesday, crude oil futures sailed past $77 per barrel during intra-day trade for the first time in two weeks, on positive financial results from the stock market. Adding to the oil gain, the International Energy Agency projected an increase in demand for 2011. Also boosting sentiment was a report late last week outlining a drop in U.S. crude inventories.
Crude futures prices this week around $76 to $77/bbl are the highest since late June, and now some energy analysts foresee that $80/bbl could soon be tested.
At the close of the Tuesday, July 13, NYMEX session, light sweet crude futures ended the day at $77.15 per barrel, a gain of $5.17 compared to the week earlier settlement at $71.98/bbl.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.