U.S. Base Oil Price Report


A recent round of paraffinic price hikes was completed as Chevron and SK raised postings between 40 cents and 70 cents per gallon. On the naphthenic side, Nynas increased its pale oils by 35 cents per gallon, and San Joaquin moved prices too.

Chevron said that it boosted its Group II neutrals on Friday, Feb. 25. The company added 45 cents/gal to 100N and 220N. The heavy vis 600N went up by 40 cents/gal.

On Tuesday, March 1, SK pushed up its Group II+, III and III+ Yubase posted prices. Group II+ Yubase 3 was raised by 62 cents/gal, Group III Yubase 4 and 6 shifted up by 65 cents/gal, while Yubase 8 climbed higher by 68 cents/gal. Group III+ Yubase 4+ was elevated by 70 cents/gal.

Direct customers of ExxonMobil said the company raised its Group II+ EHC 45 by 40 cents/gal and EHC 60 by 47 cents/gal. These increases were effective on Feb. 25 along with the companys Group I increases, which were reported in last weeks Lube Report.

Ergon joined the ranks of other paraffinic producers, announcing increases of 37 cents to 43 cents/gal on its Group I and II cuts. At press time the company said it is reviewing naphthenic pricing.

Nynas said it plans to increase prices on all its pale oil cuts by 35 cents/gal on March 8. The company last raised prices on Feb. 15 by 25 cents/gal, saying overall supply is tight and that there will be no spot sales for the foreseeable future.

San Joaquin also indicated that it raised prices on its lineup of naphthenic cuts on March 1, but the amounts were not disclosed. The company said that it was pulling away from West Texas Intermediate crude related contract pricing and has alerted its indexed customers of this shift. SJR will now focus on a market-based pricing structure, which will allow the California refiner to act more quickly to adjust prices when drastic market conditions arise, as they have recently.

In a similar vein, Cross Oil said that it would not sign any new deals tied to domestic WTI-type crudes.

These crude contract related developments come on the heels of the significant disconnect that is occurring with WTI compared to other crudes that are utilized in the U.S. waterborne refineries, for example Light Louisiana Sweet, Heavy Louisiana Sweet (HLS) or foreign Brent-related crudes.

Meanwhile, front month crude oil values are flirting with the $100 per barrel mark and will most likely burst through that level in coming days. Most energy experts attribute the fairly quick rise in oil prices to the growing unrest seen in North Africa and the Middle East. But whether crude will ascend to levels seen a few years ago at $140+/bbl remains to be seen. Oil prices have surged more than 13 percent in the past week.

Regarding base oil market conditions, sources say that stiffer prices are not a surprise due largely to overall tight availability amid healthy demand. They added that rising crude and vacuum gasoil prices also helped in driving up base stocks as those elements impact operating costs at the production sites.

At the close of the Tuesday, March 1, NYMEX session, light sweet crude futures ended the day at $99.63 per barrel, a sizeable gain of $6.06 compared to the Feb. 22 settlement at $93.57/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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