Several posted price announcements reached the ears of U.S. base oil consumers this week, as ExxonMobil and Paulsboro Refining said they planned to adjust postings upward.
Direct customers of ExxonMobil said that the producer will raise all Group I base stocks by 15 cents per gallon on Thursday, Sept. 13. They added that the major was not moving its Group II+ grades at this time.
Paulsboro told its customers that it would follow by lifting its Group I cuts by 15 cents/gal on Tuesday, Sept. 18.
Several players highly suspected that other Group I producers would soon announce their intent to increase postings as well. Whether Group II/II+/III suppliers would move to modify posted prices this week, was uncertain, as observers say that supply of the more premium grades is ample.
Meanwhile, sources noted that the Group I posted price adjustments were driven higher by climbing operating costs and tighter availability amid an uptick in demand for solvent neutrals.
The oil industry has watched prices rise in recent weeks, and the upward momentum appears it will continue with added support stemming from comments made by the OPEC on Tuesday, analysts said.
In a report issued yesterday, the Organization of the Petroleum Exporting Countries said that world economic growth above 3 percent this year and next should drive up global oil demand by 900,000 barrels a day this year and a further 800,000 barrels in 2013.
For over three weeks crude oil futures held firm in the high $90s per barrel. Some weeks before, oil futures had been in the low to mid $90s/bbl after climbing from the upper $80s/bbl, which was sustained for much of July. A number of experts believe that values of over $100/bbl could become reality in the coming weeks.
Vacuum gasoil differentials are also steep, with low sulfur VGO being traded at $35.50 to $36.50/bbl over crude. A premium of $33/bbl to $35.50/bbl over WTI is said to be representative of medium and high sulfur VGO.
At the close of the Tuesday, Sept. 11, CME/Nymex session, front month light sweet crude oil futures ended the day at $97.17/barrel, gaining $1.87/bbl from last weeks settlement at $95.30.
Brent Crude was trading at $115.28/bbl at the end of the day yesterday, up by 87 cents/bbl from its week-ago level of $114.41. LLS (Light Louisiana Sweet) crude was trading at a premium of about $17.35/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.