Ergon Inc. said that all of its naphthenic prices will increase by 5 cents, effective Monday. Sources said they believe other naphthenic suppliers have raised or will raise their prices, too.

Thats pretty significant because there hasnt been an across-the-board increase since August, one marketer said. There have been limited attempts to raise prices in recent months, but some of those had to be rescinded.

Some naphthenic price hikes have stuck, most notably Valeros 11-cent markups in April. In general, though, naphthenics prices have not matched the rise of paraffinics. Marketers say thats because much naphthenic production leaves the lubricant market to be used as process oils in applications such as rubber manufacturing.

To some extent, we serve different markets, one supplier said. In those cases, demand depends on the overall economy, and we see that the businesses of some buyers is still off.

When naphthenics are used as lubricant ingredients, often in industrial fluids, blenders may have the flexibility to shift between paraffinic and naphthenic base stocks. Marketers said they believe some shift from paraffinic to naphthenic has occurred recently and that the increased demand helped enable naphthenic price hikes.

I think naphthenic prices usually follow paraffinic, a marketer said. When you have a situation like you do now, where paraffinic prices have increased, thats going to allow naphthenics to follow. People are going to take that opportunity when they have it.

In the paraffinic market, Motiva on July 11 added 4 cents per gallon to all of its postings, except its Group II 600 neutral, which rose 3 cents. It was the last principal paraffinic supplier to join a round of increases that began July 1.

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