Base Oil Price Report


U.S. base oil suppliers continued leaning toward price cuts this week, even as the OPEC cartel pushed its campaign to raise crude oil prices.

Crude rose Tuesday, closing up 44 cents to $21.67 per barrel on the New York Mercantile Exchange. It marked the fourth consecutive day of crude price increases following statements that Russia, one of several major non-cartel oil producers, would join OPEC in cutting production.

Still, many observers remained skeptical about the cartels chances of pushing crude prices back to their target range of $22-$28 per barrel. Some argued that the level of cutback promised by Russia is insignificant. Others speculated that OPEC members will fail to stick to their cutbacks, expected to be as high as 1.5 million gallons per day. Moreover, many believe that the downward pressure of slackening demand will prove stronger than the cartel.

I know that OPEC is threatening cutbacks but I think that demand has decreased so much because of the economy that theyre not going to have the impact that they would like, one large base oil procurer said.

Base oil suppliers lowered prices last month but many suppliers and buyers agree that room remains for further cuts. One marketer predicted that base oil prices will fall again this year, even if OPEC manages a moderate increase in crude prices.

Crude could go a couple dollars in either direction and the price of base oil might not change, he said. What will impact the base oil market right now is that spreads are still high. If Im a betting man, Id guess that prices are going to go down.

Historic U.S. posted base oil pricesand WTI and Brent crude spot prices are available for purchase in Excel format.

Copyright 2001 LNG Publishing Co., Inc. All rights reserved.
Tim Sullivan, Editor. Lube Report, Lubes’n’Greases Magazine and Lubricants Industry Sourcebook are published by LNG Publishing Co., Inc.

Related Topics

Base Oil Pricing Report    Base Stocks    Market Topics    Other