With mark-ups announced by Citgo last week, the U.S. naphthenic base oil market wrapped up a round of price hikes that stretched out nearly a month. Marketers warned that further increases could be just around the corner, thanks to high-flying costs for crude oil.
Citgo raised prices for most naphthenic stocks by 5 cents per gallon, effective Sept. 20. A few of its process oil cuts remained unchanged. The Tulsa, Oklahoma-based refiner was the last principal U.S. naphthenic refiner to join a round of increases that began Aug. 23 when Valero implemented an across-the-board hike of 5 cents per gallon.
Cross Oil Refining and Marketing Inc., of Smackover, Ark., followed Sept. 1 with a 7-cent markup, while Calumet Lubricants Co., of Indianapolis, Ind., and Ergon Inc., of Jackson, Miss., imposed 5-cent increases Sept. 13 and 20, respectively.
San Joaquin Refining, of Bakersfield, Calif., acknowledged that its prices have risen, too, although it does so largely through a variety of automatic formulas used for different customers.
Marketers agreed that higher crude costs caused the increases. Crude closed at $30.77 per barrel on the New York Mercantile Exchange yesterday, down 6 cents.
Its all because of crude, one marketer said. Our margins are tight already so we have to react when [crude] prices go up like they have.
Another marketer added, I think naphthenics are still catching up with paraffinics. That side of the market has had five increases this year and this is just our second.
He and others agreed that a third could be in the offing, even though demand is not especially strong.
If crude stays up around $30, I think that more [base oil] price hikes are a very good possibility, another marketer said.
Paraffinic posted prices in the United States were unchanged this week.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.
|