Direct customers of ExxonMobil said that the major refiner will push up two API Group I posted prices. The company will add 10 cents per gallon to its 600 solvent neutral and lift bright stock by 20 cents/gal. These increases will be effective Thursday, March 7. Customers said the huge supplier is not moving any other postings at this time.

Meanwhile, it was understood that spot values were also on the rise, sometimes moving up several times within a week. Sources that are buying on a regular basis, but are not tied to a contract, say that suppliers upped spot values at least two or three times in the past week or so. In some cases, higher prices were apparent as sellers cinched temporary voluntary allowances (TVAs), tugging them tighter. In a few cases, TVAs were completely removed, thus making spot quotes higher.

Several consumers cited upstream favoritism for transportation fuels as the key factor driving spot base oils prices higher. Apparently, refiners continue to crank up production of transportation fuels, such as gasoline, diesel and jet fuel. To do this, refiners are consuming more feedstock to produce these refined products. This lessens the feedstock, primarily vacuum gas oil, available for the production of base oils, and stimulates firmer prices alongside improved demand for base oils.

It is also worth mentioning that VGO values are considered very steep in spite of crude prices being around the $90 per barrel mark. VGO is in great demand along the Gulf Coast and is also in short supply, according to energy experts.

The VGO supply situation was greatly impacted when the Aruba refinery, a 235,000 barrels per day facility owned by Valero Energy Corp., located in the Caribbean, ceased production last year. Aruba was a large producer of VGO and naphtha, with much of the production sold to merchant buyers along the Gulf Coast. This closure followed another key facility in the U.S. Virgin Islands shutting down earlier last year. Hovensa LLC (a partnership between Hess Corp. and Venezuelan state-owned oil company PDVSA) shut down its 350,000 b/d St. Croix operation, a large refinery that supported fuel demand in the U.S. East Coast.

Meanwhile, this was another good week in terms of healthy economic news. The Dow Jones Industrial Average hit an all time new high yesterday, surpassing its last record set back in October 2007. On Tuesday, the Dow closed at over 14,200 points. The Dow has gained more than 9 percent this year on what appears to be a healing economy and improved consumer confidence. Investors were seen in droves putting their money into blue-chip stocks.

At the close of the Tuesday, March 5, CME/Nymex session, front month light sweet crude oil futures ended the day at $90.82 per barrel, down $1.81/bbl from last weeks settlement at $92.63.

Brent Crude was trading at $111.75/bbl at the end of the day yesterday, losing 91 cents/bbl from its week-ago level of $112.66.

LLS (Light Louisiana Sweet) crude was trading at a premium of $21.85/bbl to WTI on Tuesday