ConocoPhillips confirmed during the past week that it pushed up its posted prices by 10 to 20 cents per gallon for its Group II neutrals. The company also said that the Group III products, which it markets on behalf of S-Oil Corp., moved up by 15 cents per gallon. All price increases were effective April 4.
The ConocoPhillips action completed the most recent wave of price hikes that surged through the U.S. base oils arena commencing mid-March.
ConocoPhillips pushed up its 70N by 12 cents/gal, 80N and 110N went up by 10 cents/gal, 225N was raised by 15 cents/gal while 600N climbed 20 cents/gal. As mentioned above, South Korean refiner S-Oils Ultra-S Group III grades increased by 15 cents/gal for the U.S. market.
Lube Report also learned belatedly that Calumet had increased postings on all its Group I and II paraffinic grades by 15 cents/gal, effective March 26. The price table below has been updated accordingly.
The recent round of price hikes were pushed through mainly as the result of skyrocketing raw material costs and not due to supply issues, sellers said, as crude values steadily hovered around $100 to $110 per barrel and natural gas prices headed north of $9.80 per million Btu since mid-March.
Although demand has been satisfactory in many cases, there does remain some length on certain grades, depending on producer and end use, they added. However, most players agreed that supply has steadily tightened over last four to six weeks, with a number of production sites running at reduced rates.
Some spot buyers report that a few suppliers continue to offer light viscosity grades such as 100 and 150 neutrals at levels near $2.78 to $2.83/gal FOB. Not all base oil producers agree that these prices are indicative of most regular activity, however, contending that a range of $2.95 to $3.10/gal FOB is more representative. In some situations, even higher prices were confirmed for certain consumption sectors.
Bright stock values are holding firm at levels around $3.70 to $3.85 per gallon FOB, sources said. Several players also envisage that bright stock prices will likely continue to firm following the recent news out of the Citgo camp.
Citgo Petroleum Corp. in an April 2 letter informed customers that it plans to reduce production at its Lake Charles, La., lubricants and wax refinery – which has 9,500 barrels per day of API Group I base oil capacity – to concentrate on its finished lubricants business.
Mid vis and heavy neutrals are gauged to be well-balanced with concluded net prices holding firm at a mutually agreed but undisclosed discount to posted prices, buyers and sellers said. An even tighter supply picture was slowly developing on these grades as well, according to a few sources.
At the close of the April 15 NYMEX session, light sweet crude futures settled at $113.79 per barrel, a gain of $5.29/bbl from the $108.50 settlement reported a week before.
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.