US base oil spot offers rise on high feedstocks

12 March 2008 16:31  [Source: ICIS news]

HOUSTON (ICIS news)--US paraffinic base oil spot offers rose 6-10% after feedstocks vacuum gas oil (VGO) and crude shattered another record this week, sellers and traders said on Wednesday.

Offers for Group I base oil viscosity level 150 increased to $2.90/gal, two sellers and a trader said.  The offers rose as low-sulphur VGO shot to $2.80/gal and crude flirted with $110/bbl on Tuesday.

The range for solvent neutral (SN) 150 was $2.62-2.72/gallon one week ago, according to global chemical market intelligence service ICIS pricing.

“Refiners must keep the price of those lower-viscosity oils above VGO costs, or else Group I base oils production will cease all together,” a seller said.

Refiners will divert VGO into the fuels business instead of through the base oil production stream, depending on the better profit.

US Group I paraffinic base oil sellers include ExxonMobil, Sunoco, Citgo, Valero and Calumet.

By: Heather McGuire Doyle
+1 713 525 2653

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