Ergon, Cross and Calumet put forth plans to raise naphthenic base stock prices by 15 cents per gallon, while paraffinic postings are unchanged. The U.S. base oils arena continues to experience difficult market circumstances, as both the sell and buy sides agree that supply remains tight while demand is hearty.
Ergon said it will increase its line-up of pale oils by 15 cents per gallon on Friday, July 30. The exception is 60 SUS base stock; the company had raised its price by 20 cents/gal on Thursday, July 15. Ergon said that demand continues to outpace production of all its naphthenic base stocks.
Cross Oil said it will follow suit and raise its 35 through 300 vis grades and Crosstrans 206 by 15 cents/gal on August 4. The company adjusted its mid and heavy pale oils to levels matching its internal postings on July 21. Cross has also removed all temporary voluntary allowances (TVAs) due to tight supply availability amid strong demand.
Calumet also presented plans to raise all its naphthenic base stocks by 15 cents/gal on August 10. Higher prices will apply to production from both the Princeton, La., and Houston, Texas, facilities. Calumet said that it is experiencing strong demand from both the domestic and export markets.
In the paraffinic sector, prices remain steady at unchanged levels, although there is also upward pressure due to strong demand and limited supply availability.
Sources pointed out that even with naphthenic prices moving up 15 cents/gal they still are below those of paraffinic base oils. Currently 30 to 60 cents/gal, the differential will narrow after the implementation of announced pale oils increases, to around 15 to 45 cents/gal, depending on grade and application.
A good amount of paraffinic and naphthenic oils have made their way to various offshore destinations in recent months, including Mexico and South America, according to sellers. They add that demand for U.S. exports remains robust in most regions, but spot volumes are scant. Except for those contractual and regular sales previously scheduled, pure spot shipments from the United States are now infrequent and will remain few and far between during August and September.
After climbing above the $79-per-barrel mark on Monday and Tuesday during intra-day trade, crude oil futures began to drop by mid-afternoon yesterday following disappointing reports on consumer confidence and manufacturing. The Conference Board’s Consumer Confidence Index for July fell from June levels and was lower than economists expected. The Richmond Federal Reserve’s regional report on manufacturing showed a slowdown as well.
A weekly report on petroleum inventories is expected to be issued today, July 28, by the Energy Department’s Energy Information Administration. Crude oil stocks are forecast to fall by 2.3 million barrels, while gasoline supplies are expected to grow by 1.1 million barrels, according to industry information.
At the close of the Tuesday, July 27, NYMEX session, light sweet crude futures ended the day at $77.50 per barrel, a loss of 4 cents compared to the week earlier settlement at $77.54/bbl.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.