As the summer gets underway, wine enthusiasts look forward to spending an evening at a cafe or a garden party, sipping a delectable glass of the popular libation.
Any winemaker knows that the type of grape used is not the only factor that determines a wines quality. Sun, rain, light and other uncontrollable conditions play an essential role in how successful a crop is, and whether the wine will be exceptional or mediocre.
Just like a warm summer breeze can help the grapes turn sweeter, healthy buying interest can add fizziness to the base oils market.
With the arrival of warmer weather and the start of the driving season, the U.S. base oils segment has indeed perked up. Add in the recent climb in crude oil values, and you have the perfect environment for price increases to take hold.
Chevron started the round of late April and early May price hikes by nominating API Group II increases of 20 cents per gallon for its light and mid-vis grades, and 10 cents for its heavy-vis cut. Phillips 66, Calumet, Motiva and Flint Hills Resources followed with their own Group II increases ranging from 10 to 20 cents.
Sources indicated that ExxonMobil implemented markups as well, lifting Group I light- and mid-vis grades 20 cents per gallon, and the 600-vis cut and bright stock 10 cents per gallon. The producers Group II cut went up by 20 cents.
Likewise, Calumet, Paulsboro and HollyFrontier marked up Group I postings by 10 and 20 cents per gallon, depending on the grade.
ExxonMobil and Kleen Performance Products lifted their Group II+ cuts by 20 cents per gallon. Phillips 66 also raised its Group II+ and III grades by 20 cents.
Winemakers cannot predict exactly how a vintage will turn out, and it is also difficult for base oil market participants to foresee what direction prices will take in the near future.
For the time being, the summer appears to have brought positive energy to the market, and both base oil producers and lubricant manufacturers are trying to enjoy the taste of a crisp season, hoping it will not turn sour overnight.