Chevron Increases Base Oil Prices Again, Prices for Several Base Oil Grades Touch Record Highs

For the second time in a month, the American multinational energy corporation, Chevron Corp., has announced a price increase for various groups of base oils. The company made an announcement on 26th May after it announced a similar price hike on 27th April 2021. On similar lines, various other Base Oil manufacturers like Excel Paralubes, Phillips 66 and ExxonMobil have indicated towards positive correction in the prices.

Chevron has increased prices for Group II 100R by 20 cents/gallon, while it has increased 220R and 600R by 30 cents/gallon. Similarly, Excel Paralubes will be increasing prices of Group II Pure Performance prices by 30 cents/gallon, while Phillips has increased the Group II+ and Group III Ultra-S base oils prices by 30 cents/gallon.

Above price increases will be applicable by 28th May 2021.

These fresh set of announcements from various producers become the fifth round of continuous increase for the year which has forced the prices northward and at record highs. The key reasons behind these back-to-back price hikes have been the tightness in supply and robust demand in the market. Furthermore, production costs are also high as raw materials are getting costlier and crude oil is running strong.

Price of various base oil categories are at record highs; price for Group I base oil with Viscosity of 100 was last assessed after the 3rd week of May at USD 1410 per MT FOB USGC (US Gulf Coast). Price of Group II base oil with viscosity of 100-110 was last assessed at USD 1205 per MT FOB USGC while per price for Group III base oil for 4cSt grade was measured at USD 2131 per MT FOB USGC.

Market dynamics globally are mirroring the US demand-supply fundamentals where supply tightness has been observed in other remaining regions which in turn has further impacted the supply and pricing of base oils. Market participants pointed out towards strained availability of mid and heavy viscosity grades. Hysterical buying of these grades has also made the availability of any spot material close to improbable although availability of lighter grades seems better for spot buying.