Base oil suppliers reported mixed reactions to their recent price hikes, with some buyers becoming more conservative with orders, while others continued to secure regular cargoes under contract or even increase their purchased volumes.
This could be partly explained by the fact that there will be a couple of turnarounds taking place in March, and buyers want to make sure they have acquired enough material to cover requirements for the next several weeks.
The Excel Paralubes 22,200 barrels per day Group II plant in Westlake, Louisiana, was expected to be taken off-line in March, while Chevrons 25,000 b/d Group II plant in Pascagoula, Mississippi, was also heard to be scheduled for maintenance the same month, according to industry sources.
Upstream, crude oil futures edged higher on Tuesday and recovered most of the lost territory from the previous day as traders continued to weigh the outlook for global crude output.
WTI oil futures have been trading in a narrow range around the low-to-mid $50s per barrel over the past month, while analysts continue to watch developments related to the production cuts agreed by OPEC members and other major crude producers.
There are also lingering concerns that U.S. production will increase, defeating in part the purpose of OPECs output cuts to boost prices. Baker Hughes reported that the number of operating U.S. oil rigs rose to the highest in 14 months last week.
West Texas Intermediate futures on the CME/Nymex settled at $53.18 per barrel on Jan. 24, up 70 cents per bbl from the Jan. 17 settlement of $52.48 per bbl.
Light Louisiana Sweet wholesale spot prices closed at $54.45 per barrel on Jan. 23, up from $53.79 on Jan. 13, according to data from the U.S. Energy Information Administration.
Brent was trading at $55.44 per bbl on the CME on Jan. 24, down 3 cents per bbl from $55.47 per bbl on Jan. 17.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.