U.S. Base Oil Price Report


Further posted price increases emerged in the U.S. base oils market, with Phillips 66, Motiva, Kleen Performance Products, Paulsboro, Calumet and HollyFrontier joining Chevron and ExxonMobil, who had revised numbers up over the previous two weeks.

Phillips 66 announced posted price increases of 20 cents per gallon for its API Group II Pure Performance 70N, 80N, 110N, and 225N grades. The producer’s 600N base oil edged up 10 cents/gal, with all the increases going into effect on May 6.

Motiva stepped out with a price initiative that raised its Group II STAR 4 (110 viscosity) and STAR 6 (220-vis) base oils 12 cents/gal, and its STAR 12 (600-vis) oil 20 cents/gal as of May 10.

Also within the Group II segment, Calumet will be lifting postings on its light and mid-vis cuts 80, 100, 150 and 325-vis by 20 cents/gal.

Calumet’s Group I 600-vis and bright stock pricing will be moving up 10 cents/gal on May 12 as well.

Similarly, Paulsboro Refining marked up its Group I 100-vis and 150-vis grades 20 cents/gal, and its 500-vis, 700-vis and bright stock 10 cents/gal, effective May 9.

HollyFrontier will lift its Group I SN70 to SN250 cuts by 20 cents/gal, while its SN500 and bright stock will move up 10 cents/gal. The increases will be effective for all shipments made on or after May 11.

In the Group II+ tier, Kleen Performance Products indicated that it increased posted prices on both its RHT 120 and RHT 240 oils by 20 cents per gallon on May 9.

Flint Hills Resources had not communicated any price adjustments by close of business on Tuesday.

On April 27, Chevron’s Group II posted prices were revised up between 10 and 20 cents per gallon, depending on the grade, while ExxonMobil was heard to have similarly lifted its Group I, II and II+ base oils by 10 and 20 cents/gal on May 4.

Market participants agreed that the increases were mainly driven by steeper crude oil values and a tightening of base oil supply in the U.S., which could be attributed to a number of factors, such as a seasonal increase in lubricant consumption.

It was also heard that buying interest from Asia had picked up because of snug spot availability of most grades and an upcoming turnaround at Formosa Petrochemical’s Group II base oil plant in Taiwan.

South Korean suppliers were also heard to have limited spot volumes to sell due to healthier demand from Southeast Asia and India.

As a result, Asian participants have tried to secure product in the U.S. and Europe. It was heard that at least 10,000 metric tons of Group II oils was on the water to India, with an arrival date in early June, and other parcels were on their way as well.

On the domestic front, sources commented the sudden tightening of supply had driven buyers to search for additional spot cargoes from producers who are not their regular suppliers.

There were also reports that there have been small production issues at the Excel Paralubes plant in Westlake, La., which can produce 22,200 barrels per day of Group II base oils. The plant’s production is jointly marketed by Phillips 66 and Flint Hills Resources. Sources said that contractual requirements were being met 100 percent, but the suppliers have no spot availability to offer. This information could not be confirmed with the suppliers directly by press time.

Upstream, West Texas Intermediate futures regained the territory lost early in the week as supply outages in Canada and Nigeria helped to alleviate concerns over a global oversupply of crude.

WTI settled on the CME/Nymex at $44.66 per barrel on May 10, up $1.01 per bbl from its May 3 settlement of $43.65 per bbl.

Light Louisiana Sweet wholesale spot prices closed at $45.38 per bbl on May 9, compared with $46.98 per bbl. on May 2, according to data from the U.S. Energy Information Administration.

Brent was trading at $45.52 per bbl on the CME on May 10, up 55 cents per bbl from $44.97 per bbl a week earlier.

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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