Hot on Motivas trail, Phillips 66 communicated that it would also be revising its Group II prices down, with the same effective date of Aug. 15. The producer will not be adjusting its Group II+ and Group III postings at this time.

Phillips 66 will be lowering its 70 and 80 vis cuts by 8 cents/gal, its 110 vis by 10 cents/gal, its 225 vis by 15 cents/gal and its 600 vis by 25 cents/gal.

Most participants were aware that given the additional Group II product introduced into the market from the new Chevron plant in Pascagoula, Miss., and the easing of crude oil and feedstock values, there would be added pressure placed on base oil pricing.

The Group II segment had been fairly tight supply-wise because of an extended turnaround at the Excel Paralubes plant in Westlake, La., which started in June, and was expected to be completed in late August.

However, the 22,200 barrels per day Group II unit resumed production around Aug. 9, slightly ahead of schedule, which will allow Phillips 66 and Flint Hills Resources, who market the output from this unit, to start building inventories sooner than expected. The two producers have been able to meet contract obligations during the turnaround, but availability in the spot market had tightened because of the reduced supply levels.

Buying interest in the domestic market has been reasonably steady throughout the summer. Activity on the export front had slowed down somewhat, but sources reported a pickup in demand for U.S. product, with several cargoes slated to move to India, Africa and Latin America in the next few weeks.

With more product becoming available from the Excel Paralubes plant, plus the fresh base stock from the Pascagoula plant, competition within the spot market had intensified, according to sources. There were reports that producers were trying to match each others offers in order to protect market share, and this trend was expected to lead to a posted price adjustment, which is what occurred this week.

On the naphthenics front, no price changes have been heard and conditions are described as generally steady. While there have not been any overt price adjustments in this segment, some price ranges have softened because of lackluster buying interest in the export sector. Suppliers have adjusted prices down to attract buying interest, particularly for Pale 60 oil, but the decreases have not affected the overall domestic market, sources commented.

West Texas Intermediate crude futures were trading at slightly lower levels than the previous week on speculation that U.S. air strikes in Iraq have improved the chances of fewer supply disruptions in that country.

The Energy Information Administration (EIA) decreased its 2014 price forecast for West Texas Intermediate crudes after the U.S. reached its highest monthly production in 27 years. According to the EIA, WTI will average $100.45 per barrel this year, versus the July projection of $100.98.

The government reduced its forecasts for global demand for this year and next and said U.S. production will reach a 43-year high in 2015, according to a Bloomberg report.

WTI settled on the CME/Nymex at $97.37 per barrel on August 12, down only 1 cent/bbl from a settlement at $97.38/bbl on August 5.

Brent crude was trading around $103.02 per barrel on the CME, down $1.59 from $104.61/bbl a week ago.

Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.