U.S. Base Oil Price Report


Flint Hills Resources decreased prices of several of its API Group II base oils this week, just days after Motiva lowered postings on two of its cuts.

FHR dropped the posted price of its 70/75 neutral 18 cents per gallon, resulting in a price of $2.45/gal, reduced its 100N oil by 20 cents/gal to $2.25/gal, and lowered its 230N cut by 13 cents/gal to $2.47/gal, effective Aug. 10. The producer’s 600N posting will remain intact, just like Motiva’s high-viscosity cut did not undergo any revisions last week.

Motiva reduced the postings of its 110N and 220N cuts by 10 cents per gallon on Aug. 7. The producer had previously lowered the price of its 110N cut by the same amount in June on ample supply and lukewarm demand for light-viscosity oils.

On the naphthenics front, it was heard that some prices were adjusted downward over the past week, but these did not apply to pale oils across the board. Decreases that did take place were said to be driven by falling crude oil and feedstock prices, together with a slight slowdown in demand as summer wraps up.

High-viscosity paraffinic oils, both in the Group I and II categories, are still snug and are expected to remain so for the next few months, according to sources.

Planned turnarounds at Calumets Shreveport, La., plant in September and October are likely to contribute to the tightness, especially of heavy Group I oils and bright stock, although the producer is building inventories to cover for the pause in production.

The catalytic dewaxing unit, which produces the light-viscosity oils, will be shut down for two weeks of routine maintenance in mid-September, while the solvent dewaxing or methyl ethyl ketone unit, utilized to manufacture heavy-vis base oils, will undergo a two-week turnaround in October, according to company sources. The Shreveport facilities have capacity to produce 4,800 barrels per day of Group I base oil and 7,000 b/d of Group II cuts.

In other industry news, ExxonMobil Corp.announced that it plans to increase its light crude processing capacity at its Beaumont, Texas, refinery by 20,000 b/d. The refinery includes a 10,000 b/d Group I plant.

The increase in crude oil capacity is made possible in large part by abundant, affordable supplies of U.S. light crude from shale. This project will grow our capacity and flexibility to process light crude oils, Jerry Wascom, president of ExxonMobil Refining and Supply Co., said in a press release.

ExxonMobil also announced on Aug. 6 that it has executed two agreements to obtain horizontal development rights for 48,000 acres in the core of the Midland Basin. Since 2014, the company has executed five agreements covering 135,000 operated net acres in the basin.

Upstream, West Texas Intermediate (WTI) continued on a downward trek Tuesday, briefly dipping below $43 per barrel for the first time since March on concerns of weakening demand from China after the country devalued its currency. Ongoing global oversupply of crude oil also weighed on numbers.

WTI settled on the CME/Nymex at $45.74 per barrel on Aug. 11, the same as its Aug. 4 closing.

Brent crude was trading around $50.49 per barrel on the CME on Aug. 11, up from $49.99 per barrel a week ago.

Editors note: When the Aug. 5 issue was emailed, the U.S. Base Oil Price Report did not reflect posted price changes by Motiva, which went into effect Aug. 7 and are highlighted in the price table below. The Aug. 5 report currently posted on LNGs website does reflect these changes.

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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