With crude oil prices remaining soft, U.S. base oil suppliers said that prices for the main lubricant ingredient could fall again in the near future.
Base oil suppliers cut prices just last month, citing steep drops in the cost of crude. Still, industry insiders said this week that refining margins remain wide enough to warrant further price reductions.
Spreads are awfully high compared to historical averages, one marketer said. If crude stays down and spreads stay where they are, I think we could see another cut before the end of the year.
Marketers and brokers said base oil price cuts will become even more likely if crude prices continue to fall. OPEC officials have said in recent weeks that they intend to cut production in hopes of returning crude prices to their target range of $25-$28 per barrel. Yet crude prices fell further during the past week, with West Texas Intermediate closing at $19.92 per barrel Tuesday.
Historic U.S. posted base oil pricesand WTI and Brent crude spot prices are available for purchase in Excel format.
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