In the fast-changing pricing environment that appears to have become the new normal, HollyFrontier and Calumet joined the circle of API Group I producers revising prices downward, following movements by ExxonMobil and Paulsboro the previous week. On the naphthenic front, Ergon will also lower its prices on Dec. 8.
Effective Dec. 1, HollyFrontier decreased all of its Group I grades by 10 cents per gallon, with the exception of bright stock, which was reduced by 20 cents/gal.
Calumet will also be moving the price of its 600 cut down by 10 cents/gal, and bright stock by 20 cent/gal as of Dec. 4.
Last week, ExxonMobil decreased its Group I and II+ posted prices by 10 cents/gal, but its bright stock was the only grade to be revised down by 20 cents/gal, with all adjustments becoming effective Nov. 28, according to industry sources.
Similarly, Paulsboro will move down its Group I postings by 10 cents/gal and its bright stock by 20 cents/gal on Dec. 3.
In a previous iteration of price adjustments, which was completed in early November, Group I prices had seen drops between 15 to 41 cents per gallon.
No price changes emerged in the other paraffinic base oil categories, but a new round of revisions should not be completely discarded given the current combination of oversupply, sluggish demand, and a need to lower inventories ahead of year-end, sources commented.
In the naphthenic camp, producers have been very busy adjusting prices as well, trying to keep up with plummeting crude oil and feedstock prices.
Ergon will lower the price of its naphthenic base oils by 20 cents/gal, effective Dec. 8. This move comes as raw material prices continue to decrease, a company notification explained.
The adjustment follows very closely a similar spate of pale oil price revisions which started on Nov. 14 and seemed to culminate with San Joaquin Refinings decrease on Nov. 25.
The previous revision had resulted in price cuts of 25 cents/gal for the light grades, and 20 cents/gal for the heavy oils from a majority of producers, including Ergon, Cross Oil, and Calumet. San Joaquin had lowered the price of all of its oils by 20 cents/gal.
Upstream, West Texas Intermediate crude futures dipped well below the $70 per barrel mark after the Iraqi government and Kurdish authorities reached an agreement that could result in increased Iraqi oil exports. Crude futures remain bearish because crude output in the U.S. is the highest in more than three decades, while global demand seems to be weakening.
Additionally, the Organization of Petroleum Exporting Countries (OPEC) decided not to reduce its quota of 30 million barrels a day at a Nov. 27 meeting in Vienna.
WTI settled on the CME/Nymex at $66.88 per barrel on Dec. 2, down $7.21/bbl from a settlement at $74.09/bbl on Nov. 25.
Brent crude was trading around $72.54 per barrel on the CME on Dec. 1, down $5.79/bbl from $78.33/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.