Such sharp swings in crude frequently spur changes in base oil prices, but market observers have downplayed the likelihood of base oil markdowns during crudes fall. Paraffinic posted prices have not changed since a round of increases in early March. A variety of reasons have been cited: base oil demand has risen, as it typically does during springtime; maintenance turnarounds and production problems at ExxonMobils Baytown, Texas, refinery have hampered supply; turnarounds in Europe have constrained supply there, reducing the threat of exports to the United States; Shell Oil Co. has closed its Deer Park, Texas, base oil plant and plans to close its Martinez, Calif., plant Sept. 1.

But some sources said this week that crude has dropped far enough – and remained down long enough – that there may be downward pressure on base oil prices. Thats not necessarily to say that price cuts are likely in the immediate future.

The refiners are going to hold onto these margins for as long as they can, one marketer said, noting that base oil margins were hammered early this year because suppliers waited so long to raise prices when crude spiked. The naphthenic market may not respond until the effect of Shells closings becomes evident.

On the paraffinic side, theres a better rationale [for price cuts], but theres so much uncertainty in the market that it may not happen.

This source and others said theyve heard no clamor for cuts from purchasers.

Ive heard a few people ask about it, a marketer said. But nobodys making a lot of noise about it.

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