U.S. base oil market participation was thin this week, with the holiday season in full swing. Market conditions remain fairly well balanced with no changes to most prices and supply/demand fundamentals.
Players attention, however, was directed toward completion of the Paulsboro Refinery sale and the installation of significantly lower posted prices.
On Dec. 17, PBF Energy Co. announced that its subsidiary PBF Holding Co. completed the purchase of the Paulsboro Refining Co. in Paulsboro, N.J., from Valero Energy Corp. (See related story.)
With the conclusion of this transaction last week, Valeros API Group I posted prices were no longer valid. The new operator of the base oil facility, PBFs Paulsboro Refining Co. (PRC), has alerted the market of its posted prices, which are outlined in the chart below.
PRC said its postings – decreases of 9 cents to 58 cents per gallon from Valeros postings – are reflective and representative of current market conditions.
ExxonMobil announced this week that its Beaumont, Texas, refinery has resumed normal operations after a three-month scheduled turnaround. A company spokesman declined to say whether the refinerys 10,000 barrel per day Group I plant was impacted.
Meanwhile, there are a number of planned outages to begin in the first quarter. Although details are presently limited for some of these turnarounds, rumors suggest that at least two or three large refiners are taking down their facilities for upwards of a month, possibly longer. These suggested downtimes will impact the availability of paraffinic base oils.
In additions to anticipated paraffinic turnarounds, there are also several planned outages to take place in the naphthenic arena in the upcoming quarter.
San Joaquin will commence a two-phase maintenance program at its 8,100 b/d pale oil refinery in Bakersfield, Calif., the company said. The turnaround will essentially last for about five weeks. The first leg of the planned outage will impact its output of heavy pales. Once completed, another turnaround segment commences that will curtail its light vis pale oils output.
Cross Oil also plans to take its 5,000 b/d Smackover, Ark., site down for a three-week turnaround in February for scheduled maintenance.
Front-month crude oil futures jumped over the $89 per barrel mark this week with outer month futures traded at better than $91 per barrel.
Whether steeper crude oil values will prompt a round of base oil posted price hikes remains unclear, but some players anticipate higher prices will emerge if crude is sustained at current levels. They added that supply is also tight enough to justify a price hike.
At the close of the Tuesday, Dec. 21, NYMEX session, light sweet crude futures ended at $89.82 per barrel, a gain of $1.54 compared to the Dec. 14 settlement at $88.28/bbl.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.