U.S. Base Oil Price Report


ExxonMobil stepped out with an initiative to raise its posted price for bright stock by 25 cents per gallon. Valero reacted with plans to adjust its posting by the same amount, while Holly is reviewing its position. Calumet is a holdout in this round of price moves, and other posted prices are unchanged.

ExxonMobil informed its customers last week that it moved up its bright stock posted price by 25 cents per gallon on Friday, Oct. 29. According to several direct buyers of ExxonMobil, the company indicated that a higher price for the much sought-after grade was necessary due to heightened demand amid scarce availability.

In response to this action, Valero moved its bright stock posting up 25 cents/gal today, Nov. 3. Customers said that Valero suggested much the same reasoning for increased pricing for bright stock as other providers: demand is strong while inventories remain scant.

Holly Corp. did not increase its posted bright stock price this week. The company plans to take some time to consider its supply/demand circumstances and whether it will follow this price move. Holly recently removed a 50 percent sales control plan on bright stock that had been in play since July.

Calumet said it would not follow this particular round of bright stock moves, as its posting is presently higher (at $4.45/gal) than ExxonMobils (now at $4.27/gal). Calumet indicated that it will continue to keep a close eye on market developments, noting that supply/demand conditions are conducive for higher prices. The company plans, however, to adjust lower-priced accounts given firmer price ideas now in the marketplace.

Ergon is also a large supplier of bright stock, but the company does not make public its posted price. However, Ergon brought other news to the market yesterday.

Ergon took advantage of the recent unplanned outage at its Vicksburg, Miss., naphthenic refinery, and completed maintenance that had been planned for February. With these repairs, our base oil manufacturing capacity now sits at 22,000 barrels per day, and we will soon be conducting tests to determine our improved crude capacity, the company said. Capacity at Vicksburg was previously 19,000 b/d.

The additional capacity will allow us to refill depleted inventories over the next few months and develop new product offerings, Ergon said, adding that a February turnaround will now be unnecessary. Production was interrupted at Vicksburg when a crude-unit heater malfunctioned Sept. 13. Ergon said all units will stream by today, Nov. 3.

Market activity has been described variously this week by different sources. Some players say that demand has slowed significantly compared to the past several months, while other participants maintain that buying interest is still robust. A few suppliers said that they expect to achieve their largest-volume month on record, while other suppliers say that November activity is at a normal level.

Crude oil futures began to trek higher at the start of the month and rallied nearly two percent on Monday. Futures did even better on Tuesday, blowing through the $84 per barrel mark during the daily session. Data showing manufacturing expansions in China and the U.S. had lent support for higher oil demand, sources revealed.

Also, earlier this week, Saudi Arabias oil minister signaled that crude oil values are in a comfortable zone between $70/bbl and $90/bbl, a range where prices have been the better part of the year.

The ministers comments are likely to aid in the consolidation of prices in the $80/bbl to $90/bbl range, one analyst said on Tuesday.

At the close of the Tuesday, Nov. 2, NYMEX session, light sweet crude futures ended the day at $83.90 per barrel, a gain of $1.35 compared to the week earlier settlement at $82.55/bbl.

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

Related Topics

Base Oil Reports    Base Stocks    Market Topics    Other