Guarded optimism characterized the U.S. lubricants industry yesterday, as base oil buyers and sellers alike awaited word on the impact of Hurricane Ike on affected facilities.
Industry participants say they expect tight supply to keep base oil prices stable for the time being, despite sinking crude prices. Customers expect price decreases, one base oil supplier noted, but with refineries short and turn-arounds coming, its not likely to happen.
With 24 percent of API Group I production and more than 40 percent of Group II production offline right now, a base oil supplier noted, the day that postings go down will certainly be postponed.
Regarding industry recovery from Hurricane Ike, everyone is optimistic, another source said. We dont know if allocations will follow. Its too soon to tell.
SK has introduced its Yubase 4 Plus product to the U.S. market, posted at $6.71 per gallon. This is the first Group III+ base stock posting in the market.
On the finished lubricants pricing front, Chevron last week postponed its announced Oct. 10 price hike. In late August, Chevron gave notice of an 11 percent increase; no other majors followed suit. Chevron told customers last week it will provide no less than 30 days notice prior to reinstating the price increase.
At the close of the Tuesday, Sept. 16, NYMEX session, front-month light sweet crude futures settled at $91.15 per barrel, a drop of $12.11 from the week-earlier close at $103.26.
Base oil pricing editor Carolyn L. Green, like many in Houston, is without power, email and reliable phone connections this week. When power is restored, she 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.