Following the flurry of price increases that were implemented in the United States during the last couple of weeks, business appeared to have returned to its regular rhythm.
As a result of increase initiatives by a vast majority of producers, paraffinic base oil prices within the API Group I category went up by 12 and 15 cents per gallon, depending on the grade, between March 9 and March 14.
In the Group II segment, there was large variation in the increase amounts and implementation dates, with producers calling for price hikes of 10, 12, 15, 17 and 18 cents/gal, and effective dates ranging from March 9 to March 15.
Within the Group II+ tier, postings moved up by 12, 15, 17, 20 and 23 cents/gal – again, depending on the producer – and implementation dates falling between March 8 and March 15.
Finally, in the Group III category, producers nominated increases of 17, 20, 23 and 25 cents/gal, which went into effect between March 8 and March 15.
On the naphthenic front, Calumet announced a price increase of 15 cents/gal, effective March 23, closely followed by Cross Oils initiative, which lifted pale oil prices by the same amount, but with an implementation date of March 20.
Aside from narrowing margins and largely stable crude oil prices over the last couple of months, the main drivers for the increases were said to be healthy demand and a tightening of supply on ongoing and upcoming plant turnarounds, not only in the U.S., but in Asia and the Middle East as well.
The outages include a current turnaround at the Excel Paralubes Group II plant in Westlake, Louisiana; a turnaround at Chevrons Group II plant in Pascagoula, Mississippi, in April; a maintenance shutdown at Ergons plant in Newell, West Virginia, in late March/early April; and a turnaround at one of Motivas three base oil trains at its Port Arthur, Texas, refinery in June.
An ongoing shutdown that is causing a tightening of Group III supplies on a global scale is the outage at the Shell-Qatar Petroleum GTL Pearl Group III facility in Ras Laffan, Qatar. The Pearl plant has capacity of 6,000 b/d of Group II and 22,000 b/d of Group III oils (according to LubesnGreases Guide to Global Base Oil Refining) and was heard to have been experiencing production problems since last December due to issues in the gasifier units.
Upstream, crude oil futures slipped on Tuesday on expectations that this weeks U.S. crude inventory reports would reveal a rise in U.S. supplies.
Traders were also watching developments linked to the production cut agreement among members of the OPEC and whether the deal would be extended beyond June.
West Texas Intermediate futures on the CME/Nymex settled at $47.34 per barrel on March 21, down 38 cents/bbl from the March 14 settlement of $47.72/bbl.
Light Louisiana Sweet wholesale spot prices closed at $49.64/barrel on March 20, compared to $49.65/bbl on March 13, according to data from the U.S. Energy Information Administration.
Brent was trading at $50.96/bbl on the CME on March 21, up 4 cents/bbl from $50.92/bbl on March 14.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.