Flint Hills Resources lifted its Group II posted prices yesterday, Dec 11. Light grades, including 70HC, 75HC and 100HC, moved up 10 cents/gal. Mid grade 230HC and heavy vis 600HC climbed 15 cents/gal.

Motiva plans to adjust its Group II and II+ grades in a similar vein on Monday, Dec 17. Star 3, 4 and 6 will go up 10 cents/gal, while Star 12 and Star 5+ will move up 15 cents/gal.

Market activity continues at a slow pace amid confusing indicators. Some players speculate that posted prices may rise again in the near term due to still-high crude values and squeezed operating margins. Others ponder whether producers might consider lowering spot offers, at least for several base oil grades, given an apparent oversupply situation.

For now, sources report that there are no substantial changes regarding spot offers and most suppliers continue to weigh their options. On the other hand, the current wave of price increases implemented beginning in late November will impact those contract buyers linked to postings.

In the Group III arena, supply/demand fundamentals continue to be more positive than those surrounding Group I, II and II+, sources indicate.

Oil prices rose back over the $90 per barrel mark yesterday in anticipation that the U.S. Federal Reserve will cut interest rates to help bolster the U.S. economy. The U.S. is the world leader in oil consumption.

Late Tuesday afternoon the Federal Reserve said that it was lowering an important short-term rate by a quarter of a percentage point, the latest in a series of rate cuts that the central bank hopes will stimulate an economy some fear is on the brink of a recession.

Higher oil prices were also supported on news of several crude oil pipeline shutdowns in the U.S. Midwest, due to ice storms. Some regional refineries will be temporarily shuttered or running at reduced rates because crude oil cannot reach these plants.

Some analysts expect oil futures to continue to trade at around $90/bbl until more evidence surfaces of either further demand erosion or supply growth. Others believe futures have begun a seasonal move that could take them as low as $70/bbl.

At the close of the Tuesday NYMEX session, light sweet crude settled at $90.02 per barrel, a gain of $1.70 over the $88.32 settlement reported last week.

Carolyn L. Green, based in Houston, can be reached directly at carolynlgreen@gmail.com.

Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.