Base Oil Price Report

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Now that the biggest U.S. base oil producers have lowered their postings, the lubricants industry is watching the direction of crude oil prices, which could portend further adjustments in base oil price tags.

Citgo lowered prices Oct. 24 for stocks produced at Cit-Con’s Lake Charles, La., refinery, shaving a nickel per gallon from all posted grades except bright stocks, which it cut by 7 cents. Citgos action completed a clean sweep of principal U.S. base oil refiners, as all others had already followed the lead of market leader ExxonMobil, which lowered prices a week earlier.

This months price cuts were triggered by a 20 percent drop in crude oil prices caused by slowing economic activity. Now the industry is hearing predictions that crude prices could move again, though there is disagreement about what direction.

OPEC officials said this week that the organization will cut production to try to push crude prices back to its target range of $25-$28 per barrel. Some analysts, however, are skeptical of the cartels ability to shore up prices in the face of slumping demand and predict that prices will instead continue falling, perhaps significantly. Future shipments of Brent crude closed at $20.40 per barrel in the United KingdonTuesday, down 2 cents.

To boost its effort, OPEC is asking non-member oil exporters to join in cutting production. Officials announced that Oman has agreed to cooperate but other nations, including Mexico and Russia, have so far refused.

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.

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