U.S. Base Oil Price Report


More price-decrease announcements hit the U.S. base oil arena this week, as market conditions struggled to regain a steady footing.

Flint Hills Resources, ExxonMobil, ConocoPhillips, Sunoco and SK stepped out with sizeable cuts in the region of 20 to 65 cents per gallon for all API Group I, II, and III paraffinic grades.

Flint Hills Resources said it lowered all its Group II base oils by 50 cents/gal on Monday, Feb. 2.

Today, Feb. 4, ExxonMobil dropped its solvent neutral 100 vis by 65 cents/gal. SN 150 through SN 330 grades shed 40 cents/gal, while heavy neutral 600 went down 35 cents. Bright stock eased by 20 cents/gal. The major refiner also lowered its Group II+ base stocks by 45 cents/gal.

ConocoPhillips is reducing postings between 45 and 60 cents/gal, effective today, Feb 4. The producers 70, 80 and 110 vis grades slid 60 cents, while 225 is down by 55 cents and so is the 600 neutral. The Group II+ and Group III Ultra-S oils that ConocoPhillips markets for Korean producer S-Oil are all down 45 cents/gal.

Also on Feb. 4, Sunoco moved its Group I base stocks prices between 20 and 65 cents/gal. Light vis 70 and 150 neutrals tumbled 65 cents/gal, SN 250 slipped 50 cents, heavy neutral 500 vis went down 35 cents, and bright stock lost 20 cents/gal.

On Thursday, Feb. 5, SK plans to lower all its Group II+, III and III+ base stocks by 45 cents/gal across the board.

Calumet said that it reduced naphthenic oil prices on Monday, Feb. 2. Some of the decreases are in a similar range to those initiated by Ergon several weeks ago of circa 50 to 55 cents/gal. The purpose of the Calumet price adjustments was to remain competitive in the marketplace, the company said.

Nynas said it would not release price decrease announcements, but indicated that the company would match lower-price situations if and when necessary.

Naphthenic prices have slipped in the past few weeks — although not necessarily by the full amount of recent price decreases, which in some instances were as much as 55 cents/gal. Depending on account and starting point, some buyers reaped only a drop of 20 to 30 cents/gal, while others received steeper discounts.

In general, sources said naphthenic prices are in a still-wide range of approximately $1.40 to $2.75/gal for most pale oils. Given the fast pace of price reductions recently, it seems likely that buyers are not paying as much as $3/gal for any particular grade as suggested only a few weeks ago, sources said.

The paraffinic side is even more difficult to assess this week as far as spot values are concerned, given the recent spate of price decreases issued by the producers mentioned above and including the Motiva adjustments put into play last week.

Suppliers and traders of paraffinic base oils said the market is sloppy and prices have eased lower. However, most agreed that fresh offers are not as low as some buyers might like to see. U.S. sellers are hoping that market values have reached a bottom, and that once demand kicks in, base oils prices could possibly firm even if crude oil prices continue to linger in a $38 to $42 per barrel spread.

Although still sluggish, there are some encouraging signs indicating that demand from both the paraffinic and naphthenic streams is steadily picking up. Sellers admitted that customer orders are not even close to the hefty levels reported a year ago, but sales are slowly building heading into second quarter, they hinted.

Meanwhile, from customers vantage points, inventory positions are sufficient. Therefore, buyers are reluctant to beef up stocks much more while prices are still seemingly weak.

At the close of the Tuesday, Feb. 3, NYMEX session, front-month light sweet crude futures ended the day at $40.78 per barrel, a loss of 80 cents compared to the Jan. 27 close at $41.58/bbl.

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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