U.S. Base Oil Price Report


Note: The SK price increases were reflected in the price table of an earlier version of the base oil report, but were not included in the text. The current report has beenrevised to include that information.

Additional price increase announcements surfaced this week, as Flint Hills Resources lifted prices for its API Group II oils, Phillip 66 and SK their Group II+/III grades, and Ergon its paraffinic and naphthenic products.

Phillips 66 revised posted prices for its Group II+ S2 and S3 oils and Group III S4 and S8 grades up by 20 cents per gallon on May 12.

Flint Hills Resources notified customers that it would be raising its 70/75HC, 100HC, 230HC and 600HC grades 15 cents/gal across the board, with the increases going into effect May 13.

SK raised its Group II+ YUBASE 3 oil 10 cents/gal and its Group III YUBASE 4/6/8 grades 15 cents/gal, effective May 16.

It was also heard that Ergon Refining increased its paraffinic base oils 40 through 300-viscosity by 20 cents/gal and its bright stock by 10 cents/gal as of May 12.

Ergon also announced an increase in pricing of naphthenic oils in the North American market of 15 cents/gal and 20 cents/gal, effective May 20. The amount of the increase will be based on viscosity, with the light and mid-viscosity grades moving up 15 cents/gal and the heavy grades 20 cents/gal, although certain special conditions apply, depending on contract terms.

Other naphthenic producers were understood to be evaluating market conditions, and agreed that business improved over the last few weeks. There were indications that a paraffinic base oils plant and a naphthenic facility were experiencing production issues, and that this was contributing to the tightening of the U.S. base stock market.

Both paraffinic and naphthenic producers acknowledged that supply was snug, and that many orders were received early in the month as buyers were trying to beat potential price increases.

Furthermore, buying appetite for U.S. base oils was heard to be strong in Asia, Mexico, and a number of South American countries, with spot prices in Asia moving up rapidly. Interest for Group I cuts has also been healthy in Africa and Europe.

Given the recent rise in crude oil values, buyers appeared eager to secure base oils before further increases came to fruition, sources explained.

Participants were keeping an eye on crude oil developments, as futures hit six-month highs on Monday on concerns about reduced global supply and further output disruptions in Canada, although a build in U.S. inventories limited gains.

West Texas Intermediate futures settled on the CME/Nymex at $48.31 per barrel on May 17, up $3.65 per bbl from the May 10 settlement of $44.66 per bbl.

Light Louisiana Sweet wholesale spot prices closed at $49.75 per bbl on May 16, compared to $45.38 per bbl. on May 9, according to data from the U.S. Energy Information Administration.

Brent was trading at $49.28 per bbl on the CME on May 17, up $3.76 per bbl from $45.52 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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