U.S. Base Oil Price Report


After a couple of weeks of fairly quiet fundamentals in the U.S. base oil market, Ergon said on Jan. 8 that it would decrease prices of its naphthenic oils effective Jan. 13. Calumet communicated shortly after that it would be moving down prices as well.

Ergon lowered its pale oils by 15 to 25 cents per gallon in North America, with the decrease prompted by the recent decline in raw material costs, according to a company statement.

Calumet will decrease pricing across the board on all naphthenic oils by 20 cents/gal, effective Jan. 22.

This is the fifth price adjustment for naphthenic oils since August of last year, with a previous downward revision of 20 cents/gal initiated by Ergon only about a month ago on Dec. 8, 2014. At that time, other producers had followed, also lowering prices 20 cents/gal between that date and Dec. 19.

West Texas Intermediate (WTI) futures slipped to around $45 per barrel on Jan. 13, renewing concerns over persistent instability in upstream values. Crude prices weakened on speculation that U.S. stockpiles will continue to mount, contributing to a global supply glut that has caused prices to fall to their lowest levels in more than 5 and a half years.

Other naphthenic oil producers are evaluating market conditions before deciding whether to undertake any price adjustments. Aside from plummeting crude oil values, prices in both the naphthenic and paraffinic segments continue to be weighed down by a supply overhang and lackluster demand.

On the paraffinic side, January business was said to be steady and proceeding as expected for this time of the year. No price changes were mentioned this week, following several strings of consecutive price reductions in the last five months.

In base oil production, Calumet is planning a two-week turnaround at its 6,900 barrels per day naphthenic base oil plant in Princeton, La., in mid-March. The companys paraffinic plant in Shreveport, La., which has the capacity to produce 11,800 b/d of API Group I and II paraffinic base oils, is likely to shut down for maintenance in the summer.

Cross Oil will also be completing maintenance work at its 5,000 b/d naphthenic base oil plant in Smackover, Ark., for slightly less than two weeks during the February/March timeframe.

Downstream, it was heard that ExxonMobil will be decreasing the price of its branded and unbranded lubricants and greases by up to 3.5 percent Feb. 2. Phillips 66 also relayed to its customers a 4.5 percent price reduction for its finished lubricants, mentioning an effective date of Feb. 2 (see related story in this issue of Lube Report).

Chevron was the first producer to step out with an up to 3.5 percent decrease for finished lubes, gear oils and greases, which is to become effective Feb. 6.

Upstream, as mentioned above, WTI crude futures settled on the CME/Nymex at $45.89 per barrel on Jan. 13, down $2.04 per barrel from a settlement at $47.93 per barrel on Jan. 6.

Brent crude was trading around $47.43 per barrel on the CME on Jan. 12, down $3.67 per barrel from $51.10 per barrel 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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