Phillips 66 increased prices on a number of its base oils, but left a few unchanged. The producer’s 70 and 80 vis cuts were raised by 8 cents/gal to $2.63/gal, and its 600 vis oil moved up by 19 cents/gal, resulting in a price of $2.99/gal. These upward adjustments went into effect on June 8. There were no revisions on the Group II 110 and 225 vis cuts, or on the Group III oils.

The increase on the heavy-vis cuts were largely driven by a tight supply/demand balance and firm crude prices.

Phillips 66 also reported snug conditions for its low-vis cuts, and a second supplier also mentioned being almost sold out of the light oils, but other producers’ availability was more plentiful for the lighter grades, as appeared to be the case for Motiva, according to sources.

Some market players said the price move came as no surprise, as producers had been hoping to improve margins, which have been squeezed by recent upswings in crude oil values. Futures have rebounded 30 percent since March 18 through Monday this week as U.S. drillers have curbed production after prices collapsed last year.

In some cases, utilizing feedstocks for fuel products proved to be more lucrative than manufacturing base oils, sources explained, and many base oil plants have not been running at full capacity.

Climbing spot values for some of the heavy cuts also supported the upward adjustments, with many suppliers raising values in recent weeks, or stopping discounts altogether.

While base oil demand has so far been healthy and in line with expectations for the spring season, requirements appear to have fallen under an early summer spell and have started to slow down, suppliers said.

Export activity was reported as steady, with Group I and II material and some naphthenic volumes finding their way to different destinations in Latin America, Africa, and India. Buying interest from Mexico has dwindled as Petroleos Mexicanos’ (Pemex) base oil plant was heard to be back on stream, following a shutdown.

Naphthenic market players are following developments on the paraffinic front with great interest, since price movements on that side of the business often represent a prelude to trends on the pale oils side.

Upstream, West Texas Intermediate settled on the CME/Nymex at $60.14 per barrel on June 9, down $1.12 from its June 2 settlement at $61.26 per barrel.

Brent crude was trading around $64.88 per barrel on the CME on June 9, down 61 cents per barrel from $65.49 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.