An upward price trend seems to be gaining traction in the U.S. base oils market after last weeks Chevron and Flint Hills Resources increases went into effect and several other producers announced increases.
Phillips 66 notified its customers that it would be raising the price of its API Group II Pure Performance 70N, 80N and 110N grades by 15 cents per gallon, and its 225N and 600N oils by 20 cents/gal, as of March 11.
Sources indicated that ExxonMobil had lifted its Group I light- and mid-vis oils 15 cents, its SN600 17 cents, and bright stock 12 cents, all on March 14. The producer’s Group II EHC 65 and Group II+ EHC 45 moved up 15 cents.
Calumet will increase all of its paraffinic grades within the Group I and II categories by 15 cents/gal, with the exception of bright stock, which will go up 12 cents/gal as of March 16.
HollyFrontier communicated that its Group I SN70-100-150 and 250 grades would be lifted 15 cents/gal, its SN525 would increase 17 cents/gal, and its bright stock would move up 12 cents/gal, also citing an effective date of March 16.
Paulsboro will be increasing its light grades 15 cents/gal, its SN500 and SN700 oils 17 cents/gal, and its bright stock 12 cents/gal as of March 17.
Kleen Performance Products will also be raising its Group II+ RHT 120 and RHT 240 by 15 cents/gallon, effective March 21.
The price hikes were said to be prompted by a rebound in crude oil prices amid tightening base oil supply, following a couple of plant turnarounds undertaken by Motiva in Port Arthur, Texas, and Phillips 66/Flint Hills Resources at the Excel Paralubes plant in Westlake, La. One of the suppliers was heard to be sold out of a few grades until after April 1 as a result.
Most producers agreed that product requirements had improved, and inventories were tightening, with the heavy-vis cuts deemed particularly in high demand. A supplier described buying interest as “solidly good” – although not extraordinary – while another seller said that appetite for the light-viscosity grades had been strong for the last 30 days.
Last week, Chevron had stepped out with a price initiative that raised its Group II light-viscosity grade by 15 cents/gal and its mid- and heavy-vis oils by 20 cents/gal as of March 9.
Likewise, Flint Hills Resources had reacted rapidly to the shift in fundamentals and increased its postings 15 cents/gal across the board, nominating the same effective date as Chevron.
Both base stock producers and buyers were keeping a watchful eye on crude oil price developments, given that prices appeared to be up one day and down the next. West Texas Intermediate futures slipped for a second day on Tuesday as Iran increased crude exports and appeared reluctant to join major producers in freezing output to reduce global oversupply.
WTI settled on the CME/Nymex at $36.34 per barrel on March 15, down 16 cents/bbl from its March 8 settlement of $36.50/bbl.
Light Louisiana Sweet wholesale spot prices closed at $39.85 per barrel on March 14, compared with $40.40/bbl on March 7, according to data from the U.S. Energy Information Administration.
Brent was trading at $38.74/bbl on the CME on March 15, down 91 cents/bbl from $39.65 a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.