Calumet joined the ranks of other API Group I producers, upping its Group I postings by 30 cents per gallon. Group II postings are also on the move, as Chevron stepped out with 20 to 25 cents/gal increases.
Effective today, March 28, Calumet is hiking its Group I 700 and bright stock postings by 30 cents per gallon. Calumet also said it will increase prices on other viscosity grades that it sells into the Group I market. In certain cases and for certain specific applications, Calumets prices for 100, 150 and 325 vis will be adjusted upward up by 30 cents/gal. However, Calumet said it is not revising its Group II postings at this time.
Calumets action wraps up a full round of posted price hikes for solvent neutrals and bright stocks in the Group I category.
Chevron said that it will boost postings for its Group II neutrals effective Friday, March 30. The company plans to add 25 cents/gal to 100 N and 220 N. The heavy vis 600 N will be upped by 20 cents/gal.
Key factors in the recent posted price adjustments were rising feedstock and operating costs as well as improved demand in recent weeks, sources emphasized.
Market watchers anticipate that more posted price increases will likely emerge from other Group II and III providers in the coming weeks, as demand continues to gain momentum against overall balanced – and in some cases tight, depending on grade – inventory positions.
Many producers continue to cope with difficult operating costs, which have mounted significantly this quarter. While naphthenic producers upped pale oil prices about a month ago, prices have just now been implemented in the paraffinic sector.
As recently reported, Valero plans to shut down operations at its 235,000 barrel-per-day Aruba fuels refinery by end March due to poor economics. In mid-February, Hovensa LLC shut down its 350,000 b/d St. Croix, U.S. Virgin Islands, fuels refinery after losing money for three consecutive years.
Both of these facilities were large suppliers of vacuum gas oil to refineries along the U.S. Gulf and East Coasts. VGO is a key feedstock and costing tool for a number of base oil plants. Low sulfur VGO values have advanced steadily over the past several months and reached a premium of $34/bbl to WTI this week, according to energy analysts.
At the close of the Tuesday, March 27, CME/Nymex session, front month light sweet crude oil futures ended the day at $107.33 per barrel, up $1.72/bbl from last weeks settlement at $105.61.
Brent crude was trading at $125.52/bbl at the end of the day yesterday, a modest gain of $1.33/bbl from its week-ago level at $124.19. LLS (Light Louisiana Sweet) crude was trading at a premium of about $20.75/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.