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December 24, 2014

Volume 17 Issue 52

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U.S. Base Oil Price Report

Just in the nick of time – and before most participants had wrapped up business for the year – Flint Hills Resources, SK, ExxonMobil and Paulsboro communicated that they would be decreasing paraffinic base oil postings, culminating a round of price adjustments initiated by Motiva on Dec. 16.

In the naphthenic arena, San Joaquin Refining joined such producers as Ergon, Calumet, and Cross Oil in lowering pale oil prices by 20 cents per gallon across the board, with an effective date of Dec. 19.

As far as paraffinic prices are concerned, following fresh revisions by API Group I producers HollyFrontier and Calumet the previous week, sources mentioned that ExxonMobil had decreased its Group I SN100 postings by 45 cents/gal, its SN150 by 40 cents/gal, its SN300 and SN600 by 45 cents/gal, and its bright stock by 35 cents/gal, effective Dec. 22.

In a similar pattern, Paulsboro will be marking down its Group I SN100, SN500 and SN700 by 45 cents/gal, its SN150 by 40 cents/gal, and its bright stock by 35 cents/gal, but with an effective date of Dec. 26. 

HollyFrontier and Calumet had lowered their Group I postings by 45 cents/gal, with the exception of bright stock, which had been moved down 35 cents/gal.

In the Group II category, most producers revised prices down a week ago, while Flint Hills notified its customers that the company would be decreasing prices on Dec. 18. The producer dropped its 70/75HC and 100HC grades by 50 cents/gal, and its 230HC and 600HC cuts by 55 cents/gal.

Similarly, Motiva, Chevron, and Calumet had adjusted prices down by 50 cents/gal and 55 cents/gal – depending on the grade – the previous week, while Phillips 66 trimmed its Group II postings by 60 to 65 cents/gal.

In the Group II+ and III segments, SK moved all of its Group II+/III prices down by 40 cents/gal, as of Dec. 18. This followed 40-cent drops by Phillips 66 on Dec. 16.

ExxonMobil’s Group II+ 110/130 oil was heard to have been cut by 45 cents/gal and its 190 grade by 50 cents/gal on Dec. 22, according to market sources.

The posted price revisions were prompted, among other things, by plunging crude oil and feedstock prices, an oversupply of base oils, weaker demand, and a need to lower inventories at the end of the year.

Despite the repeated price adjustments seen on the base oil side and the sharp drop in crude oil values over the last several weeks, finished lubricant buyers had lamented that lube suppliers had so far not reflected the lower values in their pricing.

This week, however, Chevron stepped out with a price decrease for its lubricants, gear oils, and greases, effective Feb. 6, which it communicated to customers in a letter dated Dec. 19. For details, please see “Chevron to Shave Finished Lube Prices” in this issue of Lube Report.

Upstream, WTI crude futures reversed course on encouraging data released by the Department of Commerce that the U.S. gross domestic product grew at a 5 percent annual rate from July to September, the largest increase since 2003.

WTI settled on the CME/Nymex at $57.12/bbl on Dec. 23, up $1.19/bbl from a settlement at $55.93/bbl on Dec. 16.

Brent crude was trading around $61.69 per barrel on the CME on Dec. 23, up $0.63/bbl from $61.06/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.