U.S. Base Oil Price Report


News of API Group I posted price adjustments filtered through a quiet U.S. base oils marketplace this week. ExxonMobil lead the pack with 20 and 25 cents per gallon decreases. HollyFrontier and Paulsboro Refining followed suit.

Direct customers of ExxonMobil said the producer lowered its Group I postings today, Dec. 21. Solvent neutrals 100, 150, 330 and 600 were adjusted down by 25 cents/gal, while bright stock shed 20 cents/gal.

On the heels of the ExxonMobil announcement, HollyFrontier reduced its lineup of Group I base stocks, also effective today, Dec. 21. The Tulsa-based producer knocked 25 cents/gal from its 70, 100, 148, 250 and 525 vis cuts and chopped 20 cents/gal off bright stock.

Paulsboro Refining will reduce it posted price on Tuesday, Dec. 27. The company plans to decrease its 100, 165, 500 and 700 vis base stocks by 25 cents/gal and lower bright stock by 20 cents/gal.

In many cases, suppliers concur that they are ending the year with reasonably balanced inventory positions alongside expected customer orders for the coming months. Depending on grade, some base oils will be readily available while others will continue to be tight, particularly as a number of planned turnarounds are scheduled to commence later in Q1.

Buyers admit that it was difficult sourcing many grades within the Group I/II/II+ and III categories in the first half of 2011, but some relief finally came in the latter part of the summer.

However, Group II and III base oils are still largely tight, although suppliers report that customer orders are being filled regularly and without delay.

Chevron continues to enforce its long running sales allocation on a few base stocks. Motiva also maintains its sales allocation on Star 5+, but lifted its sales restrictions on Star 4 several weeks ago.

Looking upstream, crude oil values are steady in the high $90s per barrel range – slightly down from the $100+ levels seen the past few weeks. Some energy analysts are expecting crude to burst back through the $100/bbl mark in the coming weeks as European economic news took a more positive turn this week. As well, U.S. economic observers believe that the outlook is much rosier than seen for some time thanks in part to good news on construction and retail sales.

At the close of the Tuesday, Dec. 20, CME/Nymex session, front month light sweet crude oil futures ended the day at $97.22 per barrel, down $2.92/bbl from last weeks settlement at $100.41.

Brent crude was trading at $ 107.03/bbl at the end of the day yesterday, down $2.48/bbl from its week-ago level at $109.51. LLS (Light Louisiana Sweet) crude was trading at a premium of about $9.85/bbl to WTI on Tuesday.

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

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