U.S. Base Oil Price Report


Although the U.S. base oil market was generally quiet this week, two naphthenic producers announced price hikes of 25 cents to 30 cents per gallon, wrapping up a round of pale oil increases.

San Joaquin Refining told its customers that it will hoist light vis grades by 30 cents per gallon while pushing up mid and heavy vis pale oils by 25 cents/gal, effective Feb. 11. The company said that it is dealing with a backlog of orders for mid and heavy vis. The refinery completed phase one of a planned turnaround that commenced in late January. Phase two is scheduled to begin April 1, at which time the plant will shut down for three weeks for a catalyst change, impacting production of light vis naphthenics.

Nynas advised its customers that all its pale oil grades will be bumped up by 25 cents/gal, effective Feb. 15. The company said that overall supply is tight and that there will be no spot sales for the foreseeable future.

Suppliers of both paraffinic and naphthenic products agree that customers orders are robust and much better than may have been expected for mid February.

Regarding paraffinic, most grades remain tight, although there has been some improved availability, depending on supplier. Despite this, however, most producers admit that it is difficult to offer any additional volumes, even to contract buyers that may have requested a few extra truckloads.

Meanwhile, pure spot trade remains thin, and it is likely that offshore activity will continue at a slow pace, a trader said. Regular contractual business for the deep-sea market is ongoing.

SN 150 neutral, a grade that is often readily available, has grown tight over the last month or so, one supplier noted. The source added that it is now as tight as most of the heavy grades were since the last quarter of 2010. Mid vis grades are very tight as well.

American Refining Group has a planned turnaround at its Bradford, Pa., plant, slated to start in late March. The downtime will last for approximately two weeks to complete general maintenance. The refiner is beefing up inventories in advance of the program and expects to have sufficient stocks to cover contractual obligations.

Looking upstream, crude oil values lost steam over the past week, shedding several dollars and falling back into the upper $80s per barrel region.

Energy experts say China increasing its key interest rates to help slow inflation in its growing economy triggered the recent downturn in oil futures. China’s central bank raised interest rates for the third time since October to rein in inflation.

As well, investors are concerned about growing crude oil inventories amid only so-so demand for oil and gas while the economy is still in recovery mode, according to analysts.

At the close of the Tuesday, Feb. 8, NYMEX session, light sweet crude futures ended at $87.48 per barrel, a loss of $3.29 compared to the Feb. 1 settlement at $90.77/bbl.

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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