The U.S. base oils market was dealt a full house in terms of posted price increases, with a number of players joining those producers who had stepped out with announcements earlier this month.
Only hours after Motiva and Phillips 66 announced that they would be raising posted prices on March 26, SK increased API Group II+/III base oil values by 20 cents per gallon on its YUBASE 3 and 8 cuts, and 15 cents/gal on its YUBASE 4 and 6 grades, also with an effective date of March 26. However, SKs announcement was not received in time to be included in last weeks newsletter. The revised prices appear in the table below.
Flint Hills followed hard on the heels of the other suppliers and announced an increase of 15 cents/gal for its Group II 70/75HC cut, 5 cents/gal for its 100HC oil, 10 cents/gal for its 230HC cut and 18 cents/gal for its 600HC grade, effective March 28.
Calumet was not far behind when it communicated its intention of raising its Group II 80 vis base oil by 20 cents/gal, while the 100-150-325 vis cuts were increased by 10 cents/gal, effective Mar 31.
Shortly after, ExxonMobil was heard to have raised posted prices on all of its Group II+ oils by 14 cents/gal, effective April 1, completing the round of Group II/II+/III producers seeking price increases.
Within the Group I segment, only one producer – Calumet – has not indicated price revisions so far, but was heard to be mulling possible adjustments.
ExxonMobil was heard to have announced a 14 cents/gal hike for its SN100-150 cuts, and 10 cents/gal for its SN300-600 and bright stock, with an effective date of April 1.
Paulsboro Refining adjusted its postings up by the same amount as ExxonMobil, i.e., 14 centsgal on its light grades and 10 cents/gal on its heavy-vis cuts, but with an implementation date of April 4.
HollyFrontier was understood to have raised prices by 14 cents/gal on its SN70-150 cuts, 10 cents/gal on its SN250, and 15 cents/gal on its SN525 and bright stock, effective April 2.
Motiva and Phillips 66 were the leaders of the paraffinic pack this time around, but they moved prices up about three weeks after Chevron had first implemented posted Group II price hikes of 25 to 30 cents/gal on March 5.
Motivas Group II increases ranged 8 cents/gal to 20 cents/gal, depending on the grade. Motiva was also heard to have removed its 10 cents/gal temporary competitive allowance (TCA) on the Star 4 cut, effectively lifting the price by 18 cents/gal, sources explained.
Phillips 66 lifted Group II prices between 10 cents/gal and 20 cents/gal, while its Group II+/III increases ran from 15 cents/gal to 20 cents/gal, depending on the product.
The increases were prompted by narrow margins and snug supply, sources said, and most participants knew price movements were in the cards because the spring season is when producers typically implement price hikes as demand flourishes and supply tightens.
Market sources said they were not surprised that most suppliers increases were more moderate than Chevrons, as many are striving to maintain a competitive edge in view of the added Group II capacity that the producer is expected to bring on stream from its new plant in Pascagoula, Miss., in early May.
Healthy domestic demand, recent and upcoming turnarounds, and tight availability were also supporting the 15 cents/gal to 20 cents/gal increases recently introduced into the naphthenic base oil segment.
Upstream, West Texas Intermediate crude futures weakened on a U.S.-Russia agreement to the need for a diplomatic solution to tensions over Ukraine.
WTI settled on the CME/Nymex at $99.74 per barrel on April 1, up 55 cents from a settlement at $99.19/bbl on March 25.
Brent crude was trading around $105.62 per barrel on the CME, down $1.37 from $106.99/bbl a week ago.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.