News of posted price hikes from SK, Holly and Valero reached the market over the past week. These increases follow price adjustments by other paraffinic producers and complete a round of hikes that began earlier this month. This week’s confirmed increases ranged from 5 to 35 cents per gallon.
On Tuesday, Jan. 19, SK raised its API Group III Yubase 3 cSt by 15 cents per gallon, while shifting other Group III and III+ base stocks 5 cents/gal higher.
Holly Resources raised its lineup of Group I posted prices effective Jan. 19. The company lifted its light and mid vis grades by 25 cents/gal, and bolstered its 525 vis and bright stock by 35 cents/gal.
On Jan. 19, Valero pulled up its Group I 100 and 500 neutrals along with bright stock by 25 cents/gal. The heavy grade 700 vis bounced up 30 cents/gal, while the 165 vis inched higher by 12 cents/gal.
Stepping out on the naphthenic side, San Joaquin Refining informed its customers that it was removing all temporary voluntary allowances (TVAs). The company also said that those customers not already paying listed prices would see increases of 10 cents to 20 cents/gal, depending on segment and location. These changes will be in effect on Friday, Jan. 22.
Meanwhile, supply/demand fundamentals are holding steady, according to suppliers. Customer requirements are at expected levels for January, and the outlook for March-to-April is viewed as much improved compared to one year ago. A few sources expect that by June, market activity could resume a pace that was more common in the early 2000s and before the industry went very quiet about 16 months ago. Most sources, however, do not expect to see a repeat of the feverish demand that was experienced from late 2006 through mid 2008.
Looking upstream, after reaching above the $83 per barrel mark, crude oil values began losing upward momentum during the past week as temperatures across the United States warmed up. Still, prices remain in the high $70s/bbl. Whether crude values will move higher remains uncertain at this juncture. Dependent on certain variables such as the strength or weakness of the U.S. dollar, stock indices, and crude oil stock balances, oil prices could spike higher or move lower and thus repeating a pattern that has been more-or-less in play for eight months, analysts pointed out.
In industry news, Cross Oil and Refining is preparing for a planned turnaround to commence in early February, to last for approximately two weeks. The downtime is for yearly routine maintenance. The company is presently beefing up stock positions to ensure customer orders will be covered while the facility is offline.
A planned turnaround at Motivas Port Arthur, Texas facility is believed to have begun late last week, according to sources. During this routine maintenance the major refiner plans a partial catalyst change and one of three trains will be offline. The downtime is expected to last about three weeks, with the plant back to normal rates in early February. Inventories have been built up to accommodate customer requirements for the duration of this scheduled turnaround.
At the close of the Tuesday, Jan. 19, NYMEX session, light sweet crude futures ended at $79.02 per barrel, a loss of $1.77 compared to the Jan. 12 settlement at $80.79/bbl.
Correction: Early editions of the U.S. Base Oil Price Report last week incorrectly reported changes to ExxonMobil’s API Group II+ prices. The EHC 45 (110-130 vis) posting increased 5 cents per gallon, but the company’s other Group II+ posting was unchanged, according to sources.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.