Additional posted price decreases emerged on the heels of Motivas adjustments, with sources reporting that Flint Hills Resources, Phillips 66 and ExxonMobil would be lowering postings this week.
Flint Hills Resources notified its customers that the company would be reducing its API Group II 70/75HC and 100HC grades by 5 cents per gallon, its 230HC cut by 11 cents/gal and its 600HC oil by 22 cents/gal as of Aug. 21.
Phillips 66 announced a price decrease of 3 cents/gal for its Group II Pure Performance 110N base oil, and a 10-cent/gal reduction for its Pure Performance 600N grade, with an effective date of Aug. 24. Postings for the producers 70, 80, and 225N grades will remain unchanged.
Sources noted that ExxonMobil would be decreasing its Group II EHC65 and Group II+ EHC45 by 5 cents/gal, effective Aug. 29.
Last week, Motiva had decreased its Group II STAR 4 (105 SUS) grade by 5 cents/gal, its STAR 6 (220 SUS) by 10 cents/gal and its STAR 12 (600 SUS) by 21 cents/gal.
Other U.S. producers remained on the sidelines, watching developments and evaluating conditions to determine whether they warranted price revisions.
Price cuts often accompany a slowdown in base oil demand at the end of the summer, although this year the price decline was expected to come later than in years past as availability has been unusually tight over the last several months.
While suppliers continue to note a fairly snug supply scenario for a majority of paraffinic grades, it appears that the heavier cuts such as the Group II 600N are more readily available than the light and mid-viscosity grades. As a result, these base oils are seeing steeper price drops.
Limited extra availability continues to be observed in the Group I segment, with significant spot cargoes of bright stock particularly difficult to locate, and interest from export markets such as Mexico still described as healthy.
On the naphthenic side, prices were heard to be steady, with orders characterized as brisk and suppliers holding lean inventories.
Upstream, crude oil futures edged higher on Tuesday, boosted by expectations that data this week would show that U.S. crude stocks have fallen for an eighth consecutive week.
Futures have been under pressure in previous trading sessions because OPEC compliance with agreed production cuts fell to 94 percent in July, compared with 98 percent in June.
Additionally, OPEC appeared to have put off its decision whether to extend or end the output cut agreement until their November meeting, according to media reports.
On Tuesday, Aug. 22, West Texas Intermediate futures settled on the CME/Nymex at $47.64 per barrel, up 9 cents/bbl from $47.55 per barrel on Aug. 15.
Light Louisiana Sweet wholesale spot prices closed at $50.57 per barrel on Aug. 21, compared with $50.34 per barrel on Aug. 14, according to data from the U.S. Energy Information Administration.
Brent was trading at $51.87/bbl on the CME on Aug. 22, up $1.07/bbl from $50.80/bbl on Aug. 15.
Low sulfur vacuum gas oil traded at Sep. WTI plus $9.50/bbl ($56.87/bbl), and high sulfur VGO was at crude plus $9/bbl ($56.37/bbl) on Aug. 21. In comparison, low sulfur VGO was at $57.09/bbl, and high sulfur VGO at $55.84/bbl on Aug. 14, according to PetroChemWires Daily Refinery Focus.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.