Boring. Quiet. Slow, but after all, its January. Thats how most sources described the U.S. base oil market this week. One buyer volunteered, Theres a lot of oil out there. Im getting all kinds of offers. But most producers contended that the level of base oils in their tanks is about where they want it.
At todays spot prices, a source claimed, the Group I guys are losing money and the Group II guys are breaking even at best. No one is making any money. Buyers and sellers alike noted that mid-February traditionally brings a pick-up in demand, in anticipation of the spring driving season.
Much of the industrys attention this week was focused on job cuts at Penreco – who has landed where, and who hasnt – as Calumet digests its new acquisition. Calumet closed on its purchase of Penreco for about $267 million in cash, excluding certain adjustments, on Jan. 3.
There are no changes in posted paraffinic prices this week, nor do sources report any announced changes in naphthenic prices.
A base oil marketer pointed with concern to the broader petroleum markets current volatility. Theres a lot of uncertainty, he said, and no one likes uncertainty. But then, its January.
At the close of the Tuesday, Jan. 15, NYMEX session, light sweet crude settled at $91.90 per barrel, downa hefty $4.43from the Jan. 8 close.
Carolyn L. Green is on vacation this week. Her price report will return next week, Jan. 23.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.