U.S. Base Oil Price Report


NOTE: Early editions of this week’s U.S. Base Oil Price Report’s price chart didn’t include base oil price increases for Paulsboro that go into effect May 29. The updated chart now reflects those increases.

Hot on the heels of ExxonMobils price increase announcement last week, Chevron stepped out with a 10 cent-per-gallon hike for its API Group II base oil cuts, setting an effective date of May 27.

According to sources, ExxonMobil increased its Group I posted prices by 10 to 15 cents/gal, depending on the grade, with the 100 and 150 neutral cuts climbing 10 cents/gal, the 330N and 600N cuts 12 cents/gal and bright stock 15 cents/gal on May 23. All of the producers Group II+ postings were also lifted by 8 cents/gal.

Chevrons West Coast Group II postings were raised 10 cents/gal across the board, with the 100R moving up to $4.22/gal, 220R to $4.52/gal and 600R to $5.28/gal.

In the Group I segment, HollyFrontier will be lifting prices as well, with its SN 70-100-150 cuts edging up by 10 cents/gal and its SN 250, 525 and bright stock moving up 12 cents/gal on May 28.

Paulsboro Refining also joined the group of producers who will be raising prices, and will be increasing its VP 100 and 165 cuts by 10 cents/gal, its VP 200-850M by 12 cents/gal and its bright stock by 15 cents/gal, effective May 29.

Market players said that it was surprising that ExxonMobil had initiated an increase, but what was even more baffling was that Chevron would also be seeking an increase when the producer is about to introduce a significant amount of Group II oils from its new plant in Pascagoula, Miss. If anything, participants would have expected some competitive price action before the plant achieves full operation in July.

As one industry player put it: Interesting market out there, with Chevron starting up and prices increasing. Who thought that those two statements would accompany each other?

The increases are said to be driven by a tight supply and demand scenario, together with high crude oil and feedstock costs, according to sources.

The snug market conditions stem from healthy demand during the spring/summer season, coupled with unplanned outages earlier in the year, plus a number of recent and imminent turnarounds.

Only last week, Calumet restarted its Group I and II plant in Shreveport, La., following a routine turnaround, and the producer reports very low inventories on all viscosity grades. Calumets unit has capacity to produce 4,800 barrels per day of Group I base oil and 7,000 b/d of Group II grades.

Just around the corner is Flint Hills Resources and Phillips 66s extended turnaround at their shared Excel Paralubes refinery in Westlake, La. The Excel Paralubes plant has a production capacity of 22,200 b/d of Group II base oils and is expected to be off-line for about 58 days.

Upstream, West Texas Intermediate crude futures were lower in electronic trading than the previous week. Floor trading was closed on May 26 for the U.S. Memorial Day holiday.

WTI settled on the CME/Nymex at $104.11 per barrel on May 27, up $1.67 from a settlement at $102.44/bbl on May 20.

Brent crude was trading around $110.02 per barrel on the CME, up 33 cents from $109.69/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.

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