Despite U.S. base oil activity being fairly sluggish this week, there was fresh news of price changes. Holly said it increased several API Group I grades by 10 to 20 cents per gallon, as well as adding a new posting. Calumet rolled out its plan to drop its bright stock price by 50 cents per gallon. Otherwise, the market continued at a fairly slow tempo as the summer doldrums were taking hold.
Holly raised its SN 70 vis by 10 cents/gal, upped its SN 150 grade by 20 cents, and pushed SN 250 up 15 cents on Monday, June 22. Holly has also added a new listing to its Group I line-up of base stocks. The new grade, SN 100, has a posting at $2.05/gal. The company did not amend its SN 500 vis. On June 12, Holly lowered its bright stock posting by 30 cents/gal.
Calumet said the 50 cents/gal decrease on its Calpar 2500 bright stock, effective Monday, June 22, was to realign its posting, which had drifted higher compared to others posted prices. Calumet had issued a flat 20 cents/gal across-the-board increase on June 1, which included boosting its bright stock at that time. Shortly following that move, other Group I producers lowered their bright stock postings by 30 cents/gal.
Also on Monday, June 22, Calumet raised some of its low-end business for pale oils 150 through 750 between 20 and 30 cents/gal, depending on grade. The company said that crude values hovering at highs of around $70 per barrel for a months time is what led to this price adjustment.
Meanwhile, overall naphthenic trade remains thin, according to some suppliers. There is ample availability for all grades, but demand has slowed. Competition among producers for new business is quite apparent, buyers stated.
The paraffinic sector was also described as slow, particularly this week. Suppliers did agree, however, that there have been waves of improved demand, noting that some weeks were better than others in terms of volumes exchanging hands.
Base oil sources stressed that steadily rising operating costs have placed tremendous pressure on margins. Even though producers implemented price increases this month for many of the light and mid-vis paraffinic grades, these hikes do not necessarily compensate for the deepening loss of profit for a number of base stocks, they contended. Therefore, some sellers have backed away from participating in low-ball price activity.
Looking upstream, crude oil values – although still considered lofty at around the $67 to $68 per barrel mark this week – have come off their highs of over $73/bbl reached earlier this month. Despite oil prices slipping back under $70/bbl, base oils players pointed out that crude has increased an estimated $12/bbl in a four- to five-week span.
In other market news, Calumets Princeton, La., facility was taken off-line mid-June for a two-week scheduled maintenance turnaround. The 6,900 b/d naphthenics plant is expected to return to full operating rates in late June. Calumet said that it had prepared inventories in advance of the downtime and that all customer requirements would be covered.
At the close of the Tuesday, June 23, NYMEX session, front-month light sweet crude oil futures ended the day at $69.24 per barrel, shedding $1.23 from the week-earlier settlement at $70.47/bbl.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.