November 1, 2017
Volume 17 Issue 52
U.S. Finished Lube Prices Rise
ExxonMobil, Chevron, Chemlube, Cam2 International, Warren Oil, Pinnacle Oil and Smitty’s Supply notified U.S. customers of upcoming price increases for finished lubricants that go into effect from mid-November through early December. Factors cited in some notices include continued increases in prices for raw materials such as base oil and additives.
- ExxonMobil is raising prices as much as 6 percent on branded and unbranded lubricants and greases effective Nov. 20.
- Chevron will impose an increase of equal amount on all lubricating oils and greases effective Dec. 4.
- Chemlube plans an increase of about 23 to 25 cents per gallon, effective Nov. 20.
- Cam2 announced a 4 percent to 9 percent hike on bulk and packaged lubricants and greases effective Nov. 15.
- Pinnacle Oil will raise its prices on bulk and packaged lubes by 5 to 7 percent Nov. 15. The company said in its notice that disruptions from hurricanes Harvey and Irma pushed up pricing on raw materials and that the supply for high quality base stocks is very tight.
- Warren Oil plans a price increase between 4 and 9 percent on finished lubricants and greases effective Nov. 17. It said the adjustment is a result of continued increases in total delivered costs, including costs for base oils, additives and packaging, as well as transportation.
- Smitty’s Supply plans a Nov. 15 increase of 20 cents per gallon for bulk products, of 25 cents per gallon on its packaged lubricants and 3 cents per pound on packaged greases.
Base oil supply was slightly long and prices under pressure in the third quarter until Hurricane Harvey hit the U.S. Gulf Coast. The immediate impact of the catastrophes on the base oils industry was a tightening of product caused by plant outages, as several refineries and base oil plants lay in the path of the storm. A number of them suffered severe damages due to flooding.
Aside from production outages, base oil suppliers and consumers both had to deal with raw material supply hindrances, transportation and logistics disruptions and serious financial losses in the aftermath of the disasters.
Motiva and ExxonMobil declared force majeure in early September for oils produced at their plants in Port Arthur and Baytown, Texas, respectively, and implemented allocation programs.
As a result of the supply tightness on both the paraffinic and naphthenic sides, in combination with steeper crude oil numbers – West Texas Intermediate futures climbed from around 47 dollars per barrel in mid-August to more than 50 dollars at the beginning of October – base oil prices underwent upward price adjustments between late September and early October.
This year saw two previous rounds of finished lubricant price increases. ExxonMobil, Shell, Chevron, Valvoline, BP Castrol, Phillips 66, Citgo, Omni Specialty Packaging and Cam2 International imposed hikes of between 3 and 8 percent between Feb. 20 and March 20. The second round featured hikes of 3 to 9 percent by ExxonMobil, Shell, Chevron, BP Castrol, Valvoline, Citgo, Chemlube, Pinnacle Oil, Old World, Martin Lubricants, Cam2 and Smitty’s Supply.
Gabriela Wheeler contributed to this article.