U.S. Base Oil Price Report


Several U.S. base oil producers jumped on the bandwagon and lowered posted prices this week, joining Motiva, Calumet, Flint Hills Resources, Chevron, and HollyFrontier, all of which reduced prices in the previous two weeks. On the naphthenic side, Ergon enlisted as a newcomer to the group, announcing a price decrease of 15 cents per gallon.

Within the API Group I segment, it was heard that ExxonMobil had lowered its 100 cut by 15 cents per gallon, its 150 grade by 31 cents/gal, its 300 oil by 39 cents/gal, its 600 grade by 47 cents/gal, but the price of its bright stock remained unchanged. The price decreases became effective on Oct. 13, according to sources.

In a similar fashion, Paulsboro will adjust its 100 cut down by 15 cents/gal, its 150 cut by 31 cents/gal, and its 500-600 grades by 47 cents/gal, leaving its bright stock intact as of Oct. 16.

Calumet decreased the price of its 600 cut by 45 cents/gal, and its bright stock by 10 cents/gal, effective Oct. 14.

In the Group II sector, Phillips 66 communicated that it was revising its 70N-80N cuts down by 20 cents/gal, its 110N by 15 cents/gal, its 225N by 20 cents/gal and its 600N by 40 cents/gal, with an effective date of Oct. 10.

Additionally, Phillips 66 reduced its Group II+ S2 and S3 cuts by 15 cents/gal, and its Group III S4 and S8 grades by 13 cents/gal, also effective Oct. 10.

ExxonMobil was understood to have lowered its Group II+ EHC45 cut by 15 cents/gal and its EHC60 by 25 cents/gal on Oct. 13.

SK has not yet indicated whether it would revise prices for its Group II+ and Group III cuts.

On the naphthenic front, Ergon was the first out the gate within the pale oils segment with a price decrease of 15 cents/gal for all of its naphthenic products, which will be implemented on October 20. This move was prompted by a seasonal slowdown in demand and recent raw material cost reductions, the producer explained.

Other naphthenic producers were heard to be evaluating the market situation to decide whether to adjust prices as well.

Like Ergon indicated, the price adjustments, both on the paraffinic and naphthenic sides, have mostly been prompted by weakening demand and falling crude oil and feedstock vacuum gas oil costs in recent weeks.

Base oil market participants continued to monitor the situation with a keen eye, as the possibility of further price adjustments before the end of the year was not discarded.

Upstream, West Texas Intermediate crude futures continued on a downward trend as the International Energy Agency predicted that oil demand would grow at the slowest pace since 2009 this year.

WTI settled on the CME/Nymex at $81.84 per barrel on Oct. 14, down $7.01/bbl from a settlement at $88.85/bbl on Oct. 7.

Brent crude was trading around $85.04 per barrel on the CME on Oct. 14, down $7.07/bbl from $92.11/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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