Phillips 66 and SK stepped out with posted price decreases this week, completing the most recent round of paraffinic reductions set in motion by Motiva on Jan. 18.
Phillips 66 communicated that it was adjusting down its API Group II+ and III base oils 10 cents per gallon as of Jan. 29.
Likewise, SK dropped its Group II+ and III postings 10 cents/gal across all grades, but with an effective date of Feb. 1.
Within the Group II+ segment, sources had previously reported that ExxonMobil had marked down its EHC45 grade 10 cents/gal, while Kleen Performance Products trimmed its 120-vis and 240-vis oils 10 cents and 15 cents/gal, respectively.
The string of decreases that started in mid-January ensued in posted price cuts of 10 cents and 15 cents/gal for Group I oils.
Group II postings saw markdowns between 10 cents and 16 cents/gal, with differing reductions applied to the various grades, depending on the producer.
On the naphthenic side of the business, there were no additional reductions heard, following Ergons downward adjustment of 20 cents/gal on Jan. 27.
Demand for base oils is slowly starting to regain strength, after several weeks of tepid buying interest, given uncertainties in the upstream crude oil market and in downstream applications.
Crude oil price volatility kept base oil market players on their toes. West Texas Intermediate futures dipped below $30 per barrel on Tuesday, but recovered slightly despite concerns about mounting global supply and limited storage capacity. Hopes for a deal between OPEC and Russia to reduce oil production waned.
Goldman Sachs said it was highly unlikely OPEC would cooperate with Russia to cut output, noting that such a move would also be self-defeating as stronger prices would bring previously shelved production back to the market, according to a Reuters report.
WTI settled on the CME/Nymex at $29.88 per barrel on Feb. 2, down $1.57/bbl from its Jan. 26 settlement of $31.45.
Light Louisiana Sweet wholesale spot prices closed at $32.85 on Feb. 1, compared with $31.66/bbl on Jan. 25, according to data from the Energy Information Administration.
Brent was trading at $32.72/bbl on the CME on Jan. 26, up 92 cents/bbl from $31.80 a week earlier.
In base oil production news, Calumet started a partial turnaround at its Shreveport, La., Group I and II base oil plant. The unit has capacity to produce 4,800 barrels per day of Group I and 7,000 b/d of Group II oils. The turnaround is scheduled to be completed on Feb. 17 and will only affect production of the heavy grades. Since the producer has built enough inventory, it does not anticipate shipment delays during the turnaround.
San Joaquin Refining was expected to complete a turnaround at its Bakersfield, Calif., refinery on Feb. 1. Once production resumes, the producer hopes to start building inventories and be fully caught up by late February.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.