U.S. Base Oil Price Report


ConocoPhillips, SK E&P and Chevron announced price hikes this week ranging between 7 cents per gallon to 15 cents/gal, joining the list of other producers that had previously raised postings.

On Friday, March 7, ConocoPhillips implemented upward price adjustments of between 7 cents/gal and 11 cents/gal for its Group II base oils. The company pushed up 70 neutral by 7 cents/gal; raised its 80, 110 and 600 viscosity grades by 10 cents/gal; and lifted the 225 vis by 11 cents/gal. ConocoPhillips also increased its line of S-Oil Group III posted prices by 15 cents/gal across-the-board.

SK E&P raised its Group III YUBASE base stocks by 15 cents/gal on Monday, March 10.

Chevron increased its 220R and 600R neutral prices by 15 cents/gal on Tuesday, March 11. The company said it planned to keep its current 100R neutral grade price unchanged. The company also reiterated that the key objective for the price adjustments was to maintain the historical price differentials between the U.S. Gulf and West coasts.

Meanwhile, base oil market watchers continue to keep a close eye on upstream developments as crude soared past a new high of over $109 per barrel during intra-day NYMEX trade on Tuesday. Gasoline and natural gas values also shot up to new highs, trailing skyrocketing crude values.

A few base oil onlookers indicated that upward pressure on prices may continue to build, particularly if crude values are sustained at the $106 to $109/bbl level. This remains to be seen however, they added.

Overall base oil demand remains mixed, depending on the end-use segment. In some cases, customer orders are at better-than-expected levels, while in other situations, demand is soft.

Most sellers concur that spot values are slowly improving and largely in tandem with the jumps in posted prices, but not always. A few traders said that recent (sell) offers have risen by 25-40 cents/gal since January, possibly more or less, depending on grade involved and offshore destinations.

In related news, the Federal Reserve said it plans to lend up to $200 billion of Treasury securities in exchange for debt. This caused the dollar to rebound from a record low against the euro on the announcement. The Feds plan also gave a much-needed boost to the stock market. The failing Dow Jones industrials surged higher, revealing a gain of over 400 points on Tuesday.

The euro climbed to $1.5489 against the dollar on Tuesday, the highest since the single currency’s introduction in 1999, after European Central Bank council said it does not see any leeway to lower borrowing costs.

The U.S. Dollar Index, a weighted gauge against the euro, yen, pound and three other currencies, fell to the lowest point since the basket started trading in 1973 in March. The index touched 72.474 on Tuesday.

Ministers from the 13-nation Organization of Petroleum Exporting Countries have said the drop in the dollar against currencies such as the euro and yen justifies higher oil prices.

At the close of the Tuesday NYMEX session, the front-month (April) light sweet crude futures settled at $108.75 per barrel, a steep gain of $9.23/bbl from the $99.52/bbl settlement reported on March 4.

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.

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