Amid the exceptionally tight supply of Group II 200/220 viscosity oils, light grade viscosity Group I oils SN100, 150 and mid-grade 200 and 300 are in demand for blending in formulations where these can be substituted for a Group II 200/220.
While not all formulated applications can take the Group I light grades, many can and the demand for these oils is increasing during the tight supply conditions that prevail across the US base-oil market in the recovery period from hurricane effects.
Additionally, demand from the Mexican market for these same grades is adding to the upward shift on prices.
Market sources said the Mexican market has been actively bringing in Group II base oils in 2017. With the severe pinch on these oils following Hurricane Harvey, Mexican buyers are turning to the light grade Group I base stocks from the US.
Group I domestic market prices for the light and mid grades moved up about 17 cents/gal over the last two weeks. The Group I brightstock range was recently adjusted up 10 cents/gal because of the demand amid overall short supply in US base oils.
The following graph shows the market price trends for several Group I base oil grades.
The most recent assessment for brightstock at the Brownsville, Texas, location is $3.35-3.45/gal FOB Brownsville. Group I 100 viscosity light grade base oil was most recently assessed at $2.16-2.20/gal FOB US Gulf.
Image above: Bases oils are used to make motor oil like the one showed above. Source: WestEnd61/REX/ShutterstockFollow Judith on Twitter