U.S. Base Oil Price Report


Customers in the U.S. base oil market were presented with more API Group II price notices over the past week from Flint Hill Resources, Phillips 66, Chevron and Calumet. These moves followed a lead by Motiva, when the producer dropped posted prices between 30 and 38 cents per gallon.

FHR told its customers that it lowered its Group II 70 and 75 neutrals by 36 cents/gal, pushed down 100 by 40 cents/gal, and adjusted 230 and 600 vis grades by 30 cents/gal. The revised posted prices were effective this past Thursday, Jan. 10.

On Monday, Jan. 14, Phillips 66 changed its grades between 25 and 35 cents/gal. Posted prices for neutrals 70 and 80 dropped by 32 cents/gal. The 110 vis went down 35 cents/gal., and 225 shifted lower by 25 cents/gal., while 600 lost 30 cents/gal. The company also confirmed that it did not adjust any Ultra-S Group II+ and III postings this round.

Yesterday, Jan. 15, Chevron revised Group II 100R posting by minus 38 cents/gal. The 220R and 600R neutrals shed 30 cents/gal.

Calumet plans to chop 30 to 38 cents/gal. on its Group II postings on Thursday, Jan. 17. The company lowered its 80 vis by 35 cents/gal., while knocking off 38 cents/gal. from 100 and 150 vis grades and taking 30 cents/gal. from the 325 posting.

Market players now wonder whether Group II+ and III may follow the leads of the Group I and II producers, who dropped posted prices during December and January, respectively.

Suppliers acknowledge that demand is picking up, and is much improved from the lackluster pace seen in November and December. An uptick in buying interest can be seen in both the paraffinic and naphthenic sectors.

Sources pointed out that perhaps the revised and lower prices for Group I and II grades, could have prompted an earlier-than-normal surge in customer orders. In most years, an uptick in demand is usually noted around mid-February.

Meanwhile, it is suspected that most base oil plants are running to scheme, although perhaps not at top rates while attempting to balance supply/demand fundamentals. However, as the spring fling season approaches, and if demand continues to improve week-to-week, sources believe that producers will crank up production output to nearer their full capacities.

It was understood that Ergons Vicksburg, Miss., refinery will be taken offline on Feb. 1 for a planned 29-day maintenance turnaround. The facility has a 22,000 barrels per day capacity for naphthenic base stocks. The company said that it did not expect any delays in customer shipments during the scheduled downtime and that all orders should be filled.

At the close of the Tuesday, Jan. 15, CME/Nymex session, front month light sweet crude oil futures ended the day at $93.28 per barrel, climbing marginally by 13 cents/bbl from last weeks settlement at $93.15. Brent Crude was trading at $110.38/bbl at the end of the day yesterday, slipping by $1.70/bbl from its week-ago level of $112.08. LLS (Light Louisiana Sweet) crude was trading at a premium of $16.30/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.

Related Topics

Base Oil Reports    Base Stocks    Market Topics    Other