U.S. base oil prices have stabilized for the moment, but observers say that is no reason to believe the calm will last.
For the first time in eight weeks, the market went a week without any changes in paraffinic posted prices. The market has already undergone at least two rounds of price hikes this year, on top of eight rounds of markups last year.
Those increases have been driven by the steep run-up in crude oil costs, as well as competition for feedstock from fuels. Buyers and sellers say crude is clearly the biggest variable in determining any future movements in base oil prices, and many say they have learned not to try to predict where crude will head next.
A lot of people are saying that crude could go up to $60 [per barrel], one lubricant blender said. I think base oils have another increase in them if that happens.
The price of crude on the New York Mercantile Exchange closed yesterday at $54.28, up $1.99 from a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.