The U.S. base oil market completed another round of price hikes the past week, with increases announced by six more refiners. Moreover, crude oil prices jumped to record levels Monday, raising the specter of further upward pressure on base oil postings.
Group II suppliers ConocoPhillips, Flint Hills Resources and Chevron all announced price hikes, as did Group III refiner SK and Group I producers Sunoco and Valero. They generally followed the pattern set by other suppliers last week – adding 7 cents per gallon to postings for light and medium neutrals and 10 cents to heavy grades and Group III products.
The only exceptions were Flint Hills 230 neutral and 600 neutral, which gained 8 cents and 11 cents respectively, and Valeros bright stock, which picked up a nickel. Valero had imposed a 5-cent increase that affected bright stock only earlier this month, so its combined 10-cent increase was consistent with other Group I suppliers.
The market has now undergone three rounds of general increases since late February, plus a separate round for bright stock. When the latest round began last week, market sources attributed it to high feedstock prices and strong demand. But sources predicted base oils may be forced up again after crude prices climbed to new records Monday. The price on the New York Mercantile Exchange topped $60 per barrel during the day Monday before easing a bit. The NYMEX price closed yesterday at $58.86, $3.73 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.