U.S. Base Oil Price Report


Calumet notified customers that it would increase its bright stock prices next week, following similar adjustments by API Group I suppliers ExxonMobil, HollyFrontier and Paulsboro in the prior two weeks.

Calumet will lift bright stock posted prices by 10 cents per gallon on April 1, while similar hikes were implemented by the other producers between March 13 and March 18.

Chevron had previously also increased its Group II prices by 20 cents/gal on March 11, and ExxonMobil was heard to have moved its Group II+ EHC cuts by the same amount on March 13.

The increases were driven by rising crude oil prices in late February and tightening conditions for a number of high-viscosity cuts within the Group I and II/II+ segments, sources said.

Both suppliers and consumers agreed that the heavy-vis cuts had seen improved demand and inventories had declined, particularly for bright stock and the Group II 600 neutral grade, leading to reduced spot supply.

A couple of producers said they had received calls from brokers seeking extra availability –

which they had been unable to offer – and buyers also mentioned difficulties in securing additional spot product beyond volumes already secured under contract.

Sources attributed some of the tightness to production cutbacks by a Canadian refiner. According to sources, PetroCanada has been snatching as much heavy-vis material from the U.S. as possible to make up for a shortfall in base oil output levels, caused either by plant issues, or a change in crude slates used for base oil production. There was no producer confirmation regarding the reason for the cutback.

Spot prices have therefore risen over the past three or four weeks, but the upward momentum seems to have been stalled by a drop in crude oil and vacuum gas oil numbers.

In production, there are reports that Motiva will be conducting a turnaround at one of three trains at its Port Arthur, Texas, base oil plant in the third quarter, but a specific date has not been determined yet. The facility has capacity to produce 40,300 barrels per day of Group II base oils.

In related news, United Steelworkers union members at Motiva’s Port Arthur refinery unanimously approved a settlement between the union and oil industry representatives last week, officially ending the strike that started on Feb. 1 and had spread to 15 sites across the country.

Upstream, West Texas Intermediate futures were higher week on week, but slipped on Tuesday on expectations that an Energy Information Administration report to be released on Wednesday would show that U.S. crude stockpiles continue to mount.

WTI futures settled on the CME/Nymex at $47.51 per barrel on Mar. 24, up $4.05 per barrel from a settlement at $43.46 per barrel on Mar. 17.

Brent crude was trading around $55.11 per barrel on the CME on March 23, up $1.60 per barrel from $53.51 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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