More producers announce group I base oil price hikes in US

15 April 2011 22:09  [Source: ICIS news]

HOUSTON (ICIS)--Fresh Group I paraffinic base oil price-hike announcements emerged on Friday, following announcements made earlier by Chevron, ExxonMobil, Holly Refining and others.

Flint Hills Resources said, effective on 15 April, it would raise posted prices on paraffinic basestocks by up to 30 cents/gal on 70-75 grade viscosities; 35 cents/gal on 100 and 230 viscosities; and by 40 cents/gal on heavy-grade 600 viscosity stocks.

Ergon announced it would increase its paraffinic oil prices by 35-50 cents/gal, effective on 22 April.

Ergon did not specify individual basestocks with applicable prices per stock.

The company added that paraffinic wax prices were not affected by the increases.

Petroleos de Venezuela SA (PDVSA) has also confirmed it would raise spot prices by 41 cents/gal on its paraffinic 85, 100, 150, 300/350 light and mid-viscosity solvent neutral stock, effective on 18 April, on an ex-Venezuela basis.

For heavy viscosity 500/550 solvent neutral base oils, PDVSA said the posted prices would be increased by 46 cents/gal on the same date and shipping basis.

PDVSA’s brightstock prices will also increase by 46 cents/gal on spot prices ex-Venezuela, effective on 18 April.

These price announcements followed Group I posted price increases ranging from 22 cents/gal up to 46 cents/gal, with various April effective dates and specifications, depending upon the producer.

Base oil producers said price increases were supported by crude oil prices over the $100/bbl mark coupled with strong demand from the lubricants end-use segment and tight supply fostered by first-quarter maintenance turnarounds.

Suppliers last raised prices in late February through early March, primarily pushed by tight supply that remain largely unabated going into the second quarter.

Crude oil prices were in the $80s/bbl in December, rising into the $90s/bbl in the first quarter.

Benchmark West Texas Intermediate (WTI) prices were considered an anomaly by base oil producers because logistic issues thwarted getting material into the market. At the same time, Brent crude prices began to widely outpace the WTI levels.

May WTI futures on the NYMEX closed on 15 April at $109.66/bbl, up $1.55/bbl, in response to economic improvements and pre-weekend buying.  

June futures for ICE Brent crude closed on 15 April at $123.45/bbl, up $1.45/bbl, on heavy trading.  

By: Judith Taylor
+1 713 525 2653

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