Price decrease notices of 10 to 20 cents per gallon on API Group I base oils were issued during the past week by HollyFrontier, Paulsboro Refining and Calumet, mirroring ExxonMobils moves a week earlier.
API Group I producer HollyFrontier said it lowered its 70, 150 and 250 solvent neutrals by 10 cents/gal, pushed 100 vis down by 13 cents/gal, and dropped bright stock by 20 cents/gal. The adjusted postings were effective this past Friday, Sept. 16.
Paulsboro Refining will reduce its posted price today, Sept. 21. The company plans to decrease its 100 solvent neutral by 13 cents/gal, while chopping 10 cents/gal from its 165, 500 and 700 grades. Bright stock will be lowered by 20 cents/gal.
Calumet plans to decrease postings for its Group I cuts only, effective Tuesday, Sept. 27. The refiner will lower 700 vis by 10 cents/gal, and bright stock will go down by 20 cents/gal.
Whether these Group I posted price decreases will satisfy all buyers is questionable, as some consumers believe that there is room for further discounting. They also wonder whether Group II and III producers will step out with price modifications in the coming weeks, now that feedstock costs have abated.
Suppliers of the Group II and III grades believe that current postings are solid, and there is no need to alter prices. They add that still-healthy demand alongside well-balanced stocks is lending support to todays price ideas.
The naphthenic arena is also deemed stable amid fairly balanced supply/demand fundamentals. Producers admit that buyers of pale oils are hoping to see some price reduction, but so far there has been no action taken by sellers.
Sources said that the market has yet to resume the lively pace seen back in the second quarter, but surmise that business is managing a steady albeit low key stride. A few sellers are confident that activity is buoyant, depending on the buying segments and base stocks required.
Looking upstream, benchmark WTI values took a step backward on Monday, shedding several dollars to the mid $80s per barrel range, down from levels seen just days before. The disruption in crude futures was linked with the floundering stock markets. On Tuesday, the stock market bounced back somewhat and brought WTI futures back up too.
Despite WTI price ideas dropping down into the $80s/bbl region, there remains a significant premium that some refiners pay for their necessary feed stocks such as vacuum gas oil or any number of domestic or foreign crude types.
Premiums to WTI can be as much as $40/bbl, and to benchmark Brent crude differentials can run upwards of $10/bbl (plus or minus).
At the close of the Tuesday, Sept. 20, CME/NYMEX session, front month light sweet crude oil futures ended the day at $86.89 per barrel, a loss of $3.32 from the week earlier settlement at $90.21/bbl. Brent crude ended the day at $110.71/bbl compared to the week earlier settlement at $111.51/bbl.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.