U.S. Base Oil Price Report


In contrast to last January, when base oil prices kicked off the New Year on a downward trend, this year values are gravitating upwards.

Following a series of increases by paraffinic producers, Ergon and Calumet were heard to be moving up both their naphthenic and paraffinic base oil prices, while hikes announced by Paulsboro and Kleen Performance Products are also scheduled to go into effect this week.

Ergon communicated its intention of lifting its naphthenic oils in the North American market by 20 cents per gallon, effective Jan. 6. The increase will apply to all viscosities.

It was also heard that Ergons Hygold Group I paraffinic oils would be going up 20 cents/gal, with the exception of bright stock, which will increase 15 cents/gal on Jan. 6.

Calumet will be lifting its Group I 600-viscosity base oil posting by 20 cents/gal, and its bright stock by 15 cents/gal. The producers Group II 80-100-150 and 325 grades will all increase by 10 cents/gallon on Jan. 6.

Also within the Group I segment, Paulsboro will start to implement a price increase of 15 cents/gal on its bright stock, and 20 cents/gal on all of its other grades on Jan. 4, as portrayed in the price table below.

ExxonMobil and HollyFrontier adjusted Group I prices up by similar amounts as Paulsboro on Jan. 1 and Jan. 3, respectively, as mentioned in last weeks edition of Lube Report.

Additionally, sources had indicated that ExxonMobils Group II and II+ cuts would be raised by 20 cents/gal the first day of 2017.

Kleen Performance Products announced that the company would be increasing its posted prices 20 cents/gal on its Group II+ RHT 120 and RHT 240 base oils, effective Jan. 3. The producers postings have been revised on the price table accordingly.

In late December, Flint Hills Resources moved its Group II prices up by 10 cents per gallon.

The increases were mostly fueled by rising crude oil and feedstock prices over the last several weeks, and expectations that values would continue to edge up as OPEC and non-OPEC members have agreed to curb production in 2017.

However, crude oil futures fell on Tuesday after touching their highest levels in about 18 months, on traders skepticism that OPEC and other major oil producers would actually cut back output. Crude traded as high as $55.24/bbl during the day, which would have been the highest settlement since July 2015.

West Texas Intermediate futures on the CME/Nymex settled at $52.33 per barrel on Jan. 3, down $1.57 per bbl from the Dec. 27 settlement of $53.90 per bbl.

Light Louisiana Sweet wholesale spot prices closed at $55.10 per barrel on Dec. 30, from $53.61 on Dec. 23, according to data from the U.S. Energy Information Administration. There was no trading on Jan. 2 as it was a federal holiday.

Brent was trading at $55.47 per bbl on the CME on Jan. 3, down 62 cents per bbl from $56.09 per bbl on Dec. 27.

On the export front, domestic producers have been approached by Mexican buyers on the lookout for light viscosity base oils. It appears that some consumers had delayed purchases until late December, hoping to get yearend deals, but being unable to find them, were now returning to

the market to replenish stocks. However, prices have moved up since December, sources noted.

Additionally, there were reports that Mexican state-run refiner Pemex was experiencing some production setbacks, resulting in a shortage of diesel and gasoline at some locations.

The Mexican government announced last week that the price of gasoline would increase by as much as 20 percent on New Years Day, while diesel went up 16.5 percent, according to Forbes. The increases prompted protests which seemed to be rapidly spreading across Mexico.

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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