No other price adjustments emerged by press time, as Jan. 1 was a holiday and a majority of companies were closed for business.

On the paraffinic side, the market saw the year out with a mixed bag of uncertainties, including wavering demand, growing supply, and volatile crude oil and feedstock values, making it difficult to predict price trends for the new year.

While these conditions are not completely uncommon during the last few weeks of a given year, and have characterized the market in Decembers past, this time they composed a different picture from the one observed the previous year, when the market was still recovering from output disruptions caused by severe weather, and was struggling with steep production costs.

At the end of 2017, the United States base oil industry was dealing with product tightness caused by the unexpected plant outages along the Gulf Coast in the aftermath of Hurricane Harvey’s devastation. This situation, together with hefty crude oil and raw material costs, led to posted price increases as soon as 2018 started, with initiatives emerging in mid-January.

This year, the situation appeared to be poles apart, in that base stock supply was considered ample to cover requirements, while crude oil prices have tumbled from the high levels observed earlier in the year and remained quite volatile.

The softening fundamentals spurred two separate rounds of posted price decreases for a number of paraffinic grades between mid-November and mid-December, and a decrease for the naphthenic base oils.

Despite these two decreases, most paraffinic base oil prices ended the year at higher levels than a year ago. This was partly attributed to up-and-down crude oil values and production costs throughout 2018, which led to three rounds of posted price increases between January and May, one decrease in August, one increase in late September through early October, and the two decreases between November and December mentioned above.

For instance, this week, the Group II price range for the 100-110 viscosity grade was reported in a range of $2.34-3.31 per gallon, depending on the producer, averaging $3.04/gal among the five producers posting prices for this particular cut. It is worth mentioning that Motiva’s posted prices have not shown significant fluctuation during the year and values have remained much lower than other Group II producers’ postings, leading to a wider price range.

By comparison, the Group II 100-110N cut ended 2017 within a spread of $2.37-$2.91/gal, averaging $2.67/gal among the six producers that were posting prices on Dec. 20, 2017 (Flint Hills Resources has since exited the base oils market, while Phillips 66 is currently posting under the Excel Paralubes brand).

Meanwhile, during the last week of Dec. 2017, West Texas Intermediate crude oil values were hovering near $57 per barrel, whereas futures are trading close to $45 per barrel this week.

Oil futures showed slight swings at the start of the week, but both WTI and Brent posted gains on the final trading day of 2018.

However, WTI was on track for a yearly loss of 25 percent, while Brent was down 20 percent since Jan. 1.

WTI February futures settled at $45.41 per barrel on the CME/Nymex on Dec. 31, down 81 cents/bbl from $46.22/bbl on Dec. 26 (there was no trading on Dec. 25 due to the Christmas holiday and on Jan. 1 due to the New Year’s holiday).

Brent futures for March delivery closed at $53.80/bbl on the CME on Dec. 31, and had settled at $54.47/bbl for Feb. futures on Dec. 26.

Light Louisiana Sweet crude wholesale spot prices settled at $49.95/bbl on Dec. 28, compared to $48.98/bbl on Dec. 27, according to the EIA.

Low sulfur and high sulfur vacuum gas oil were both at Feb. WTI plus $14.75/bbl ($60.16/bbl) on Dec. 31. By comparison, low sulfur VGO was at $61.22/bbl and high sulfur VGO at $61.22/bbl on Dec. 26, according to data published by PetroChemWire.

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