API Group II and III supplier ConocoPhillips has increased its posted prices by 20 to 30 cents per gallon. Otherwise, the U.S. base oil market was quiet the past week, as many players attended the annual AFPM (formerly NPRA) meeting in San Antonio.
ConocoPhillips said that itplans to up postings for its lineup of Group II and its Ultra-S Group II+ and III base stocks effective Thursday, April 5. Posted prices for neutrals 70 and 80 will bounce higher by30 cents/gal, 110 vis, 225 visand 600 viswill climb by 20 cents/gal. The company also confirmed that its Ultra-S Group II+ 2 cSt and 3 cSt along withGroup III 4 cSt and 8 cStwill behiked by 20cents/gal.ConocoPhillips markets S-Oils Ultra-S base stocks in North America.
ConocoPhillips move follows Chevrons Group II increases of 20 to 25 cents/gal last week.
In the full round of Group I posting increases completed last month, prices pulled up on average 25 cents per gallon. These adjustments had placed Group I solvent neutrals and Group II neutrals in near proximity. With the current moves, however, they will no longer be at such directly price-competitive levels.
At this juncture, customer orders for paraffinic grades have largely reached suppliers’ expectations, but moving forward demand is still somewhat vague, a few sellers lamented. This doesn’t mean that demand hasn’t significantly improved, they add, because some customer orders are well ahead of previously scheduled volumes.
Overall, the naphthenic sector remains firm both in price and in supply. Suppliers hoisted prices in early March, and they say that the increases have stuck, while inventory positions remain on the tight side against robust demand for all cuts.
Recapping price indications for pale oils, sources have pegged light to mid vis naphthenic (60 to 200 vis) cuts to be in a range of $4.12/gal to $4.35/gal. Grades 300 to 700 vis were solid at circa $4.10/gal to $4.36/gal, while 1200 and 2000 vis cuts were heard to be slightly higher at $4.30/gal to $4.55/gal. In many cases, transactions are concluded on an FOB basis, although there are some instances whereby deals are done on a delivered basis. Also, aforementioned prices are the average for the bulk of the overall market. There are situations when prices concluded are below or above these spreads.
There was a spate of downtimes scheduled at pale oil facilities during Q1 and into Q2. At least one planned outage has been completed. More recently, Cross Oil took its Smackover, Ark., plant down on Friday, March 30. The facility will remain off-line for about 35 days while a new vacuum distillation tower is being installed and brought up to full operation status. San Joaquin took its Bakersfield, Ca., plant down for a two-week planned maintenance.
Meanwhile, several industry sources speculated that the Valero Three Rivers, Texas, production site may have encountered some operating issues during much of March. However, an inside source said the plant was running to scheme and would not expound on the rumored operating issues.
At the close of the Tuesday, April 3, CME/Nymex session, front month light sweet crude oil futures ended the day at $104.01 per barrel, down $3.32/bbl from last weeks settlement at $107.33.
Brent crude was trading at $124.83/bbl at the end of the day yesterday, a loss of 69 cents/bbl from its week-ago level at $125.52. LLS (Light Louisiana Sweet) crude was trading at a premium of about $22.25/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.