Although business slowed ahead of the extended U.S. Thanksgiving holiday weekend, there is some activity. Holly Corp. stepped out with a 15 cents per gallon increase to its bright stock posting.
Holly will increase its bright stock by 15 cents/gal on Dec. 1, moving its posted price to $4.51 per gallon, in a move that was not a surprise.
Calumet remains on the sidelines regarding a price move. It has not followed the ExxonMobil bright stock posted price initiative made early this month. Calumet had last increased its bright stock posting on June 16 by 20 cents/gal.
Within the past several weeks, talk circulated through the marketplace that there might be a wide-spread paraffinic price hike, but that has not transpired. The exception was ExxonMobils 25 cents/gal increase on its bright stock, with Valero and now Holly following its lead.
Sources now speculate that the likelihood of a price hike on the paraffinic side has lessened since crude oil prices retreated over the last few weeks. This is not to say that crude values are no longer a threat for base oil production, because they are, some producers lamented. Oil futures have slipped back to around the $81 per barrel level, falling off their two-year highs of $87 to $88 per barrel reached earlier this month.
The naphthenic arena endured a round of price hikes for all pale oils of 20 to 25 cents per gallon this month, with implementation completed earlier this week. Suppliers said that customers accepted the full increases. At a glance, naphthenic prices are now pegged within a range of $3.10/gal to $3.70/gal for all grades.
Breaking it down, pale 60 and transformer oil values are heard at circa $3.15 to $3.55/gal. Depending on size, some consumers are paying slightly below or slightly above this range. Some suppliers say that 100 vis business is placed around the $3 to $3.15/gal region for large buyers, while regular but smaller, average-sized buyers are paying around $3.55/gal to $3.63/gal.
Prices for 750 pale oils are gauged in the $3.22/gal to $3.35/gal region, for the use in the ink and grease segments. Buyers from other end-use segments consuming 750 pale oil are said to be paying upwards to $3.60/gal. Activity in the heavy vis 2000 pale oil arena is pulling in the highest prices, and consumers are heard to be paying in the upper $3s, around $3.58 to $3.76/gal on average.
In upstream news, Qatari Energy Minister Abdullah al-Attiyah said that if oil prices remain at current levels, OPEC will most likely not change production quotas when the group holds its December meeting in Ecuador.
Crude oil values began slipping last week and continued the trend this week. They headed back to around $81/bbl and shed some serious gains of about $6. Oil had been up to a two-year high over $88 per barrel earlier in the month.
Crude futures were impacted lower on worries over the debt crisis in Ireland and that it may spread to other euro zone countries. Also, disputes between North and South Korea and subsequent artillery action helped moved futures back down. Meanwhile, the U.S. dollar strengthened in part as a result of these problems.
At the close of the Tuesday, Nov. 23, NYMEX session, front-month light sweet crude futures ended the day at $81.25 per barrel, shedding $1.09 from the Nov. 16 close at $82.34/bbl.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.