22 February 2011 15:41 [Source: ICIS news]
LONDON (ICIS)--Firm feedstock vacuum gas oil (VGO) costs are pushing US base oils price hike announcements of around 10% just ahead of a major industry conference, industry sources said on Tuesday.
Group II seller Flint Hills Resources (FHR) announced posted price increases, the first price changes since December, a buyer said before the 15th ICIS World Base Oils Conference in London.
The FHR increases targeted a 45 cents/gal ($137/tonne) price lift on its 230 mid-viscosity base oils, with increases ranging from 35-43 cents/gal sought on light viscosity to heavy grade products effective from 22 February.
The announcement follows a similar move by Motiva late last week.
Motiva issued increases of up to 47 cents/gal effective from 18 February on its Group II and II+ product slate, buyers said.
It was unclear if other Group II sellers Chevron and ?xml:namespace>
The increases arrive just in time for the busy spring stocking season. Demand for base oils often increases in mid-to-late March as buyers prepare finished goods ahead of the
Market participants also attribute the February base oils increases to an unusually large gap between Brent crude and West
In order to compensate for the weakness in WTI, product premiums have increased.
Base oils' key feedstock, VGO, trades at a premium to WTI. Price premiums have increased to $20-25/bbl over crude oil. VGO prices were half that in December.
The conference is being held on 24-25 February.
Additional reporting by Judith Taylor
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