Paraffinic base oils in the United States appear to have started their eighth round of price hikes in 2004. Motiva triggered the latest cycle, announcing an across-the-board increase of 7 cents per gallon Monday. ExxonMobil and Calumet Lubricants joined the movement yesterday.
U.S. suppliers usually follow ExxonMobils lead in raising or lowering posted prices, but some observers speculated after Motivas announcement that the Shell-Saudi Refining joint venture may be assuming more leadership. On one occasion during the summer, Motiva lowered prices when no other supplier did. On another, it refrained from raising prices when all others did.
In this case, ExxonMobil piled on with its own increases – 7 cents per gallon for Gulf Coast postings, 10 cents per gallon on the East Coast.
According to sources, ExxonMobil said its increases will take effect tomorrow. Calumet was the only other supplier to announce markups by the close of business yesterday. It said it will also raise postings by 7 cents across the board, but has not yet decided on a date.
Sources attributed the latest round of increases to the same combination of factors cited for previous markups this year – ever-climbing crude oil costs and strong demand. Even base oil buyers acknowledged that gross base oil refining margins have slipped below normal levels.
The cost of crude on the New York Mercantile Exchange closed yesterday at $55.23 per barrel, up $1.98 from a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.