Flint Hills Resources announced that it raised all its postings for API Group II base oils this week, upping the prices by 10 to 17 cents per gallon on Monday, April 7.
The producer increased its light ends 70HC, 75HC and 100HC by 15 cents/gal, lifted 230HC by 10 cents/gal and boosted the 600HC grade by 17 cents/gal.
Most base stocks manufacturers have hoisted their posted prices since mid-March, but one Group II producer remains absent from the recent line-up. ConocoPhillips said that it was still assessing market conditions and has not made a decision to amend its prices.
Spring-time buying progresses as expected, with most customers receiving their pre-scheduled volumes, said sellers. Demand for light viscosity oils has improved from levels reported several months ago, with a number of suppliers claiming now to be in tight positions for 70 to 150 neutrals. Contract buying interest for mid and heavy vis oils is also described as healthy. Producers say they have limited stocks of these grades to offer in the spot market.
A major change reported in the spot arena in recent weeks is that sellers price offers have inched higher by an estimated 12 to 15 cents/gal on an FOB basis. Sources also noted that there is an apparent tightening of surplus base oils available.
Turning to vacuum gas oil prices, refiners this week said VGO prices are presently valued at plus $3 to $4.50 per barrel to crude for low sulfur, and minus $2 to $3 per barrel to crude for high sulfur. This translates to around $2.67 to $2.70 per gallon for LS VGO and about $2.52 to $2.55/gal for HS VGO.
On another note, some market watchers are now predicting that as the U.S. dollar continues to strengthen, as it has this week, it could potentially deter fund managers interest in investing in energy. Whether this action pans out or not remains uncertain as the energy complex and associated prices are extremely volatile.
Thus far, oil values are up about 70 percent from early April a year ago.
Although crude values had moderated to around $100 to $102 per barrel the past several weeks, the trend seems to have reversed, and oil prices have since regained upward momentum. On Monday, crude futures ran back up above the $109 per barrel mark, and the lofty levels may be sustained this week, according to some analyst reports.
At the close of the Tuesday, April 8, NYMEX session, light sweet crude futures settled at $108.50 per barrel, up $7.52/bbl from the week earlier close.
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.