19 March 2008 18:19 [Source: ICIS news]
HOUSTON (ICIS news)--Just as the US base oils market was getting accustomed to the most recent pricing ideas, ExxonMobil announced yet another increase, buyers said on Wednesday.
Buyers said ExxonMobil would lift on Wednesday the price of all Group I and Group II+ paraffinic base oil stocks, except 100 and 150 viscosity, by 15 cents/gal.
US paraffinic base oil producers had just lifted prices by 7-25 cents/gal during the first week of March. All sellers said the hikes were necessary as feedstock crude and vacuum gas oil (VGO) costs skyrocketed in February and March.
The ExxonMobil posted price for bright stock will now be $4.37/gal (€0.74/litre) free on board (FOB) US Gulf, according to global chemical market intelligence service ICIS pricing.
But a seller expressed concern that additional hikes would be necessary to maintain production as alternative values for feedstock continued to play a significant role in supply.
Most of the Group I base oil producers have the option to use the VGO feedstock to refine finished products such as gasoline, jet fuel, heating oil, and diesel instead of produce base oils.
“With refined products fetching much higher profits than the base oils, we’d rather run the feedstock through to make alternative products and not make any base oils at all”, a producer said.
Heating oil for April delivery gained 7 cents to close at $3.14/gal on Tuesday.
Meanwhile, spot material for the low-viscosity paraffinic base oils was selling from $2.80-2.90/gal FOB, according to ICIS pricing.
($1 = (€0.64)
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