Motiva surprised the market with a fresh posted price decrease and was followed closely by Flint Hills Resources, which communicated markdowns after Presidents’ Day and before the ICIS World Base Oils and Lubricants Conference in London.
Motiva moved down its API Group II STAR 4 grade (110 vis) 15 cents per gallon, its STAR 6 cut (220 vis) 20 cents/gal, and its STAR 12 oil (600 vis) 25 cents/gal, with an effective date of Feb. 16. The producer had previously revised prices down on January 18.
Flint Hills Resources will be lowering its Group II 70/75HC and 100 HC cuts 15 cents/gal, its 230HC oil 20 cents/gal, and its 600HC grade 22 cents/gal as of Feb. 17.
The new adjustments were thought to be linked to sliding crude oil and feedstock prices, together with prospects of increased base oil supply later in the quarter when a couple of turnarounds are expected to be completed.
Motiva was anticipated to restart one of its base oil trains at its Port Arthur, Texas, refinery within the next few days, following a routine turnaround which started the first week of January, while the Excel Paralubes plant in Westlake, Louisiana, will be undergoing maintenance during the last two weeks of February.
Motiva’s Port Arthur plant has three base oil trains with a total capacity of 40,300 barrels per day of Group II base oils, according to LubesnGreases Global Guide to Base Oil Refining.
The Excel Paralubes plant can produce 22,200 bbl/day Group II oils, which are marketed by Phillips 66 and Flint Hills Resources.
Calumet said the company was on track to complete a partial turnaround at its Shreveport, Louisiana, Group I and II base oil plant on Feb. 17. The unit has capacity to produce 4,800 barrels per day of Group I and 7,000 b/d of Group II oils, but the turnaround affected output of the heavy grades only. The producer did not anticipate shipment delays as it had built inventories ahead of the maintenance program.
On the naphthenics side, Ergon is expected to shut down its Vicksburg, Mississippi, 22,000 barrels per day naphthenic base oils plant for a three-week maintenance program before the end of the month. The producer has prepared inventories to cover requirements during the outage and does not expect any supply disruptions.
San Joaquin Refining completed a turnaround at its Bakersfield, California, refinery in early February and is expected to be fully caught up with requirements by the end of the month.
Cross Oils Smackover, Arkansas, base oils plant was expected to be back on line by the end of the February, as repairs are progressing well, a company source said. The refinery’s hydrotreater and cooling process equipment were damaged by a fire in early January. The unit has capacity to make 5,000 bbl/day of naphthenic oils and the producer declared force majeure after the incident.
A couple of naphthenic suppliers have been receiving orders from customers who regularly purchase from Cross, given that some cuts were heard to be in short supply.
Upstream, West Texas Intermediate futures slipped off session highs on Tuesday after four of the world’s largest oil producers consented to freezing output at January levels if other major exporters joined the agreement, crushing hopes for an actual decrease in output. Nevertheless, futures closed higher week-on-week.
WTI settled on the CME/Nymex at $29.04 per barrel on Feb. 16, up $1.10/bbl from its Feb. 9 settlement of $27.94.
Light Louisiana Sweet wholesale spot prices closed at $27.42 on Feb. 11, compared with $31.26/bbl on Feb. 8, according to data from the U.S. Energy Information Administration.
Brent was trading at $32.18/bbl on the CME on Feb. 16, up $1.86/bbl from $30.32 a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.