U.S. Base Oil Price Report


Motiva, Flint Hills Resources, Chevron and Avista Oil joined ExxonMobil and Kleen Performance Products in a round of posted price increases initiated last week.

On April 14, Motiva increased its API Group II Star 4 (105 SUS) and its Star 12 (600 SUS) oils by 10 cents per gallon and marked up its Star 6 (220 SUS) grade by 12 cents per gallon.

Avista lifted its Group II base oil 15 cents/gal and its Group III grade 20 cents/gal as of April 18.

Flint Hills Resources communicated that it would raise its Group II 70/75HC, 100HC, 230HC and 600HC base oils by 11 cents per gallon, effective April 19.

Chevron will also increase its posted prices on April 19. The producer’s Group II grades will move up 10 cents/gal across the board.

The increases emerged on the heels of initiatives by ExxonMobil and Kleen Performance Products to raise posted prices on May 1.

Last week, ExxonMobil informed its customers that the producer would be increasing all of its Group I, II and II+ base oils by 20 cents per gallon, with the exception of bright stock, which would be lifted by 15 cents/gal, sources said.

Along similar lines, Kleen Performance Products will be raising its Group II+ RHT 120 and 240 base oils 20 cents/gal on May 1.

The price table below will not reflect ExxonMobil‘s and Kleen Performance Products‘ increases until the week of May 1 when the hikes are scheduled to go into effect.

The increase initiatives were somewhat of a surprise for some market participants, as paraffinic base oil producers had implemented a series of posted price hikes in March.

However, a very tight market scenario, together with rising crude oil prices, have placed mounting pressure on base oil values, supplier sources explained.

The narrow supply and demand balance is the result of ongoing and upcoming turnarounds at a number of U.S. base oil plants.

A 52-day turnaround at the Excel Paralubes Group II unit in Westlake, Louisiana, which started in early March, is anticipated to be completed later this week.

Another turnaround was slated to start at the Chevron Group II plant in Pascagoula, Mississippi, in the next few days. The plant is expected to be down for 22 days.

A maintenance shutdown is also anticipated to be completed at Ergons Group I/II plant in Newell, West Virginia, in April.

Motiva is also expected to perform a turnaround at one of its three Group II base oil trains at its Port Arthur, Texas, refinery in June. The producer was heard to be building inventories to cover requirements during the outage.

Further details about the turnaround schedule could not be confirmed with the producers.

A majority of U.S. suppliers were striving to meet contractual obligations and appear to have little to no availability of extra volumes for spot business, market sources said. Inquiries for export transactions have been turned down by a number of producers as well.

Participants were also watching developments on the crude oil front very closely, since prices have moved up significantly over the last month.

West Texas Intermediate futures on the CME/Nymex settled at $52.41 per barrel on April 18, down 99 cents/bbl from $53.40 per barrel on April 11. In comparison, futures were hovering at $47.72 per barrel about a month earlier, on March 14.

Light Louisiana Sweet wholesale spot prices closed at $54.60 per barrel on April 17, and settled at $55.31/bbl on April 10, according to data from the U.S. Energy Information Administration.

Brent was trading at $54.89/bbl on the CME on April 18, down $1.34/bbl from $56.23/bbl on April 11.

Crude oil prices dipped to their lowest level in 11 days on a U.S. government report indicating that shale oil output in May was expected to register the biggest monthly increase in more than two years.

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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