ExxonMobil move to raise Europe base oils surprises some buyers

LONDON (ICIS)--Regular buyers of ExxonMobil’s Group I base oils in Europe confirmed on Wednesday that they had been notified of price increases that would take effect on 29 September.

ExxonMobil is understood to be seeking increases in domestic European markets of $60/tonne (€46/tonne) for SN150, $40/tonne for SN600 and $60/tonne for brightstock. The company has a longstanding policy of not commenting on pricing information.

The company’s last price increase for base oils took effect on 1 July, when $40/tonne was added to the prices of all Group I grades.

Buyers and sellers described the European market as tight, with little spot material on offer. Traders said that thin availability was preventing significant exports from Europe to other regions on a spot basis. Export prices have been rising as a result.

Buyers had been expecting a seasonal downturn in demand in the fourth quarter and that lower prices would emerge. The prospect of further price increases took some by surprise.

Inaccurate rumours about the extent and timing of ExxonMobil’s proposed increases circulated in the base oils market on Tuesday afternoon. Some market participants heard about potential increases of $40/tonne for SN150 and $50/tonne for SN600 from 1 October.

Customers said they had confirmed the true extent and timing of the increases with ExxonMobil on Wednesday morning.

The weekly ICIS Base Oils (Europe) price report on 14 September quoted domestic prices of $1,030-1,060/tonne for SN150, $1,060-1,080/tonne for SN500 and $1,150-1,210/tonne for brightstock. The ICIS pricing report does not quote prices for SN600.

($1 = €0.77)