Base Oil Price Report


Flint Hills Resources raised posted prices on three of its base oils yesterday. The paraffinic market in the United States now has had some form of markup for five consecutive weeks, after going four months without any price movements.

Group II marketer Flint Hills Resources added 4 cents per gallon to its posting for 100 neutral and 6 cents to both its 200 and 600 neutrals. It did not, however, change its posted prices for 70 and 75 neutrals.

It was the companys second round of hikes in two weeks andmade it the only Group II supplier – so far, at least – to follow increases that Motiva imposed March 22. Historically, U.S. base oil prices have moved with a fair degree of uniformity, but the market has been more disorganized than usual since the end of February. Group II suppliers lagged on following an earlier March 4 increase by Motiva, not moving their postings until ExxonMobil raised prices a week later.

Observers speculated that other Group II suppliers may be hopingMotiva will catch back up withthem. Motiva droppedits postings in relation to competitors last year after a change in catalyst raised output at its Port Arthur, Texas, plant. Some said Group II producers may be stuck in the habit of following ExxonMobil, which has led most of the markets price movements for the past several years.

Other observers said pricing chaos in the base oil market may be partly due to continued sharp fluctuations in crude oil costs. Crude prices have eased more than three dollars per barrel since setting new records in mid-month. The price on the New York Mercantile Exchange closed yesterday at $54.31 per barrel, down $1.11 in the past week and down from a high of $57.60 March 17.

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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