Base Oil Price Report


SK E&P announced last week that it will begin terminalling Group III base oils in Los Angeles, a move welcomed by West Coast lubricant blenders with a dearth of supply options.

North America has just two base oil plants west of Texas – ChevronTexacos paraffinic Group II/III plant in Richmond, Calif., and naphthenic refiner San Joaquin Refining in Bakersfield, Calif. Otherwise West Coast blenders depend on base stocks brought into the region by rail – with transportation premiums.

We welcome the addition of any new supply, one blender said Friday. Were very happy to see choice. It all helps.

SK has been in the U.S. base oil market for a few years, primarily importing oils to the Gulf Coast from its refinery in Ulsan, South Korea. In June, the company opened a second plant that increased its Group III capacity by 7,000 barrels per day to 15,000 b/d.

Lithcon Petroleum USA, SKs marketing agent in the United States, said that starting Oct. 1, SK will offer the same products at the Los Angeles terminal that it does on the Gulf – stocks with viscosities of 3, 4 and 6 centistoke. Posted prices are 10 cents higher in Los Angeles, in line with typical West Coast premiums.

Lithcon added that the Los Angeles terminal is just one of several that SK plans to establish near major centers of base oil consumption.

Posted prices are unchanged this week.

All facilities in the U.S. Gulf Coast region are focused on preparations forHurricane Ivan, which is expected to hit the northern Gulf Coast early tomorrow. The hurricane is already blamed for rising crude prices Monday and yesterday. The price of crude on the New York Mercantile Exchange closed yesterday at $44.67 per barrel,$1.51 higher than a week earlier.

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

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