In a similar fashion, Paulsboro will lower its Group I cuts by 10 cents/gal and its bright stock by 20 cents/gal next week.

This appears to be the start of a third wave of consecutive price cuts implemented on domestic paraffinic base oil prices in about six weeks.

Previously, paraffinic base oil producers had revised postings down in the first half of October, and shortly after went for a second round of decreases in the first half of November.

The early November adjustments brought about decreases between 15 to 41 cents per gallon in the Group I category, 25 to 40 cents in the Group II segment, 20 to 25 cents in the Group II+ sector, and 20 cents for Group III oils.

In the naphthenic camp, San Joaquin notified its customers that it would be lowering the price of its oils by 20 cents/gal across the board, with an effective date of Nov. 25.

Other naphthenic producers – including Ergon, Calumet, and Cross Oil – had decreased the lighter grades by 25 cents/gal, and the heavy cuts by 20 cents/gal, between Nov. 14 and 21.

In the case of the naphthenic oils, this was the second string of price decreases since late October, when prices fell 15 cents/gal.

All of these price adjustments were said to be driven by plunging crude oil prices and expectations of further drops in crude futures.

The repeated price adjustments also reflect the current state of the base oils market, which is weighed down by sluggish demand and abundant supply. These conditions are mainly impacting the Group II segment, following the introduction of additional capacity from the Chevron plant in Pascagoula, Miss., but other sectors have also been affected.

Sources said that further price decreases could be in the cards, as demand is expected to slow down even more in December, and suppliers strive to lower inventories ahead of the end of the year.

Buying interest for U.S. product from countries such as India has also subsided on account of falling base oil prices elsewhere and the availability of more competitively-priced regional product.

The U.S. base oil market is also expected to receive a second flood of new product when ExxonMobil brings a Group II/II+ expansion on line at its Baytown, Texas, plant in early 2015. While the company has not provided any details of the quantity of new product coming on stream, speculation points at the possibility that 10,000-15,000 barrels per day will be added.

In late March 2014, ExxonMobil also inaugurated a world-scale manufacturing facility that has capacity to produce up to 50,000 metric tons per year of metallocene polyalphaolefin (mPAO) synthetic lubricant base stocks at its integrated refining and chemical complex in Baytown (for more details, please refer to ExMo Confirms Baytown mPAO Capacity in the Nov. 19 issue of Lube Report).

Upstream, West Texas Intermediate crude futures started moving up on speculation that members of the Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, this week would agree on a possible cutback in oil production.

WTI settled on the CME/Nymex at $74.09 per barrel on Nov. 25, down by $0.52/bbl from a settlement at $74.61/bbl on Nov. 18.

Brent crude was trading around $78.33 per barrel on the CME on Nov. 25, down $0.98/bbl from $79.31/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.