A smattering of markups peppered the U.S. base oil market the past week, although posted prices for most paraffinic oils were unchanged. Bright stock suppliers continued a round of hikes led last week by ExxonMobil. Motiva raised its prices by 5 to 7 cents per gallon, but was the only Group II supplier to move – at least so far. Finally, most naphthenic base oil producers announced hefty increases of 10 cents per gallon, effective later this month.
As expected, bright stock suppliers kept in step with the 10 cent increase that ExxonMobil announced Feb. 28 – and which Valero followed last week. Citgo and Calumet raised their bright stock postings by the same amount, effective Friday. There was no word of movement by the markets only other bright stock supplier, Sunoco.
Motiva added a nickel to prices for all of its products except its 105 viscosity fluid, which rose 7 cents. There were no changes by other Group II suppliers by the close of business yesterday. Some observers speculated that those other companies may sit tight since Motivas postings have generally been substantially lower than the rest of the Group II market since last year. Even after last weeks markups, three of Motivas five cuts remained cheaper than postings bycompetitors.
Movements were much more uniform on the naphthenic side of the market, which technically had not had any price increases since November. Ergon triggered the latest move with an across-the-board 10 cent hike that takes effect March 16. Every other pale oil producer except Citgo subsequently announced hikes of equal amount. Those markups take effect March 18 for Cross, March 21 for San Joaquin and Nynas, and March 22 for Calumet.
Whereas bright stock producers attributed their increases to ongoing tightness of supply, the rise for naphthenics was viewed as tied to higher crude oil costs. Crude continues climbing back toward record levels reached last October. The price on the New York Mercantile Exchange closed yesterday at $54.55 per barrel, $2.81 higher than a week earlier.
This increase is definitely cost-driven, one pale oil supplier said. There are a lot of indications that crude is going to keep going up, and I think refiners are worried about falling behind and having to do really big increases to catch up.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.