The U.S. base oil market decided to go for a full-scale price increase, after all, and what a topsy-turvy round of hikes it turned out to be. After limited markups the past two weeks to bright stock and the products of one Group II supplier, this week brought higher postings for almost every product in the market.
ExxonMobil led a round of markups for bright stock at the start of March. But when Motiva subsequently raised its postings, other Group II suppliers did not immediately follow, and it appeared the increases might stop there.
The logjam broke last week, however, when ExxonMobil announced price hikes for all of its oils. There was little discernible pattern for its increases. It raised postings for 100 neutral by 8 cents per gallon, 150 neutral 9 cents, middle weights between 200 and 350 neutral by 7 cents, 600 neutral a full dime and bright stock 7 cents on top of the previous 10-cent increase. ExxonMobil also added 8 cents to postings for its Group II-plus oils.
Often when one supplier leads a price movement, others implement equal changes on the various grades. That was less the case this time. Citgo and Valero mimicked ExxonMobils increases – their own taking effect Friday and Monday – but Calumet, bumped its Group I 60 neutral by 8 cents and its bright stock by another dime, as part of hikes it implemented yesterday. Information about Sunocos posted prices was unavailable.
Group II prices were all over the place. ConocoPhillips left postings for 70 and 80 neutral unchanged but added 7 cents to its 110 neutral, 6 cents to its 225 neutral and 10 cents to its 600 neutral Tuesday. (Inimplementing those changes, the company rescinded a 4-cent hike announced a few days earlierfor its 600 neutral.) Flint Hills Resources, which sells oils produced at the same plant – the companies Excel Paralubes joint venture in West Lake, La. – increased prices on 70 and 75 neutral by 3 cents, 100 neutral by 7 cents, 200 neutral by a nickel and 600 neutral 6 cents, effective Monday. Calumet marked up 8 cents on its 80 and 100 neutrals, 9 cents on its 150 neutral and 7 cents on its 325 neutral. ChevronTexaco went up 7 cents on all three of its grades on Monday.
In the Group III market, ConocoPhillips imposed an across-the-board increase of 5 cents, while SK went up 8 cents on each of its products, effective yesterday.
Market observers agreed that it all added up to one of the more unusual rounds of increases in quite some time. Observers speculated that the disorganization of the markups might indicate that suppliers were paying more attention to their own demand-supply balances (or imbalances) than to the actions of competitors.
The price of crude oil on the New York Mercantile Exchange closed yesterday at $54.91 per barrel, 36 cents higher than last week.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.