The naphthenic base oil segment in the United States was where most of the upward price action took place in September and October; postings on the paraffinic side were generally stable. Paraffinic spot values softened slightly on improved supply and weakening demand, but they stabilized in early October as crude oil prices jumped to multi-year highs.
Naphthenic producers Cross Oil, Calumet, Ergon and San Joaquin Refining communicated increases of 25 cents per gallon, which went into effect between September 21 and October 1. Suppliers explained that the markups had been necessary to offset increases in crude oil, natural gas and transportation.
Supply in the naphthenic segment had been strained since the last quarter of 2020, and this situation was compounded by unplanned outages and maintenance programs this year. Pale oil suppliers did not expect to achieve a balanced supply and demand position until early 2022.