U.S. Base Oil Price Report


Amid rising feedstock costs, HollyFrontier stepped out with a 30 cents per gallon posted price hike. ExxonMobil increased its API Group I postings by 10 cents to 33 cents/gal, and Paulsboro did the same. On the synlube front, Calumet will raise its Group V esters by 9 cents/lb.

Price news in the Group II and III categories remained quiet.

The first producer out of the chute, HollyFrontier announced last week that it is increasing postings for its line-up of Group I solvent neutrals by 30 cents/gal effective today, March 21. Steep operating costs alongside fairly healthy demand and balanced-to-tight inventory positions were the drivers behind stiffer posted prices, sources said.

Direct buyers report that ExxonMobil will pull up its Group I base stock postings on Friday, March 23. SN 100 will go higher by 32 cents/gal, 150 N goes up 33 cents/gal, 330 N by 30 cents/gal, and 600 N will rise by 25 cents/gal. Bright stock will inch up by 10 cents/gal. Sources added that these increased posted prices were initiated by the major for much the same reason as the HollyFrontier move, with rising operating costs as the key motivator for the increases.

Paulsboro Refining advised that it will follow ExxonMobils move, effective Wed., March 28. Paulsboros postings for 100 N will rise by 32 cents/gal, 165 N goes up 33 cents/gal, 500 to 700 N increase 25 cents/gal, and bright stock moves up by 10 cents/gal.

In the Group V category, Calumet Specialty Products Partners announced it will increase prices globally by 9 cents per pound for its CalEster-branded polyolesters effective April 1, or as contracts allow. The company said that this price increase is necessary due to escalation of raw material costs, energy, and general market conditions. Calumet acquired the former Hercules synthetic lubricants business from Ashland in early January. These esters are used as base stocks for lubricants; the main applications are refrigeration, aviation, plasticizers and industrial.

Activity in the U.S. base oils market is described as generally steady overall, with some downstream segments showing strong buying conditions, while other sectors are less enthusiastic.

With global demand described as sluggish for some base oil segments against difficult operating costs, rumblings abound that there could be plant closures or temporary shutdowns. Some market watchers suspect that production rates will be reduced at many refineries, including some with base oil facilities, if they havent been yet. There have already been confirmations of several refineries bringing down FCC and crude units, while in some cases the entire refinery may be off line for extended periods.

Most recently news emerged that Valero will suspend refining operations at its 235,000 b/d Aruba fuels refinery due to poor operating conditions. Failure to find a suitable buyer for the plant helped the company’s decision to suspend operations, energy experts said. The Aruba plant was a huge provider of vacuum gas oil to Gulf Coast refineries.

The Aruba facility was considered a prime candidate for closure for many months while the plant operated at reduced rates and at a loss. Sources said that Valero is considering operating the property as a terminal, but they added that Valero will maintain the refinery “in a state that would allow a restart.

Meanwhile, after trekking higher the past few days, the price of crude lost some of its upward momentum. Analysts say the Saudi Arabian oil ministers comment that that nation would up its exports helped crude prices to lose steam on Tuesday.

Although it reached as high as the $108/barrel mark, at the close of the Tuesday, March 20, CME/Nymex session, front month light sweet crude oil futures ended the day at $105.61/bbl, easing by $1.10/bbl from last weeks settlement at $106.71.

Brent crude was trading at $124.19 /bbl at the end of the day yesterday, shedding $2.13/bbl from its week-ago level at $126.32. LLS (Light Louisiana Sweet) crude was trading at a premium of about $22 to $22.5/bbl over 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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