A few more base oil producers announced price decreases this week. Both Motiva and SK jumped on the band wagon, and notified their customers that they would be dropping postings between 20 and 40 cents per gallon. These adjustments by Motiva and SK complete a full round of posting reductions that began several weeks ago. There was also an additional surprise to reach a number of consumers ears!
Motiva alerted its customers that it shaved 20 to 40 cents/gal from its lineup of API Group II neutrals. The company knocked off 40 cents/gal from its Star 4 (110 vis), chopped 35 cents/gal from its Star 6 (220 vis) and pushed down Star 12 (600 vis) by 20 cents/gal. These adjustments were effective on Friday, June 15, according to direct buyers of Motiva.
SK told its customers that it slashed 25 cents per gallon across-the-board from its Yubase Group II+/III base oils on Monday, June 18.
In what some players are calling a surprise move, ExxonMobil was heard to have told its customers that it was making an additional posted price decrease on its Group I base stocks only. This comes on the heels of an adjustment that the major recently initiated on June 11.
Direct buyers said that ExxonMobil was planning to knock off an additional 10 cents/gal from all posted Group Iprices except 100 vis, which will lose 12 cents/gal, effective July 2. Sources pointed out that this lead time for an effective date was unprecedented, as most effective dates for paraffinic adjustments are usually within a few days to a week of announcing. (Because these adjustments wont take effect for almost two weeks, the price chart will not reflect revised postings until next weeks Lube Report.)
Fresh rumblings were being stirred in the marketplace suggesting that other producers may step out with price adjustments along the lines of this surprise move by ExxonMobil. Details are muddy at best. However, sources indicated that because a few producers chopped greater amounts off their posted prices compared to others during the most recent round of price moves, there may be concessions made to trim postings further. This remains to be seen, added a handful of sources.
Meanwhile, the economic front welcomed some positive news from the housing market. The Commerce Department indicated that builders had asked for more permits to build new homes and apartments than in the previous three and a half years. It was understood that housing starts in April surpassed previous expectations. The U.S. stock markets were also simulated with somewhat stabilizing news out of Spain and Greece, even though most economists agree that the overall European economy appears to remain in jeopardy.
At the close of the Tuesday, June 19, CME/Nymex session, front month light sweet crude oil futures ended the day at $84.03 per barrel, a modest gain of 71 cents/bbl from last weeks settlement at $83.32.
Brent crude was trading at $95.82/bbl at the end of the day yesterday, down $1.24/bbl from its week-ago level at $97.06 LLS (Light Louisiana Sweet) crude was trading at a premium of about $12 to $12.25/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.