ILMA Compoundings – January 2019 - 15
Graph 1
80
90
Crude WTI FIP Cushing, OK Assessment Spot Month +1 Closing Value (USD/bbl)
Crude LLS FIP St. James, LA Assessment Spot Month Closing Value (USD/bbl)
Taylor is senior editor for ICIS. She may be reached
at 713-525-2607 or judith.taylor@icis.com.
85
70
80
65
75
60
70
55
65
50
Jan '18
Mar '18
May '18
Jul '18
USD/bbl
second half of November and just ahead of Thanksgiving,
more posted price decreases came out, with PetroCanada
moving all of its Group II grades and one of its Group II+
grades down by 25 cents per gallon. HollyFrontier confirmed posted price decreases of 25 cents per gallon on
all grades, including bright stock. Buyers and sellers said
ExxonMobil moved all its grades down by 25 cents per
gallon. (ExxonMobil does not discuss or confirm price
movements according to its company protocols.) Excel Paralubes confirmed posted price decreases at 24-25 cents per
gallon, depending on the grade. At the time of this writing,
other producers continued to gauge the market but were
considering price reductions.
Base oil producers have been hit by the up/down crude
oil price changes at a time when U.S. lube exports are also
struggling. Market participants said logistics are challenging
to work, and, for Group I, competition from Europe to
South American destinations is becoming sharp. It should
come as no surprise that the reasons for this lie in pricing.
With Europe's production facilities basically all Group I,
and no growing appetite for Group I base oils in that region,
exporters are moving lubes at cost or lower, according to
some sources.
Additionally, with Group II and Group III appetite
growing in Europe, the advent of ExxonMobil's Group II
production, expected in the first quarter of 2019, is likely
to have an influence on the steady exports of Group II from
the U.S.
The U.S. remains a net-importer of Group III base oils, so
Europe's appetite for these premium oils is met from other
regions, the Middle East and Asia. The net-importer status
on Group III base oils and the mixture of new importers
alongside new North American entrants as well as the traditional importers continue to keep Group III busily shifting
in the fourth quarter.
Group III is less affected by the second-half balancing
act that appears ready to prevail through year's end. But for
Groups I and II, the balancing act is a thin line, with crude
oil driving the fourth-quarter base oil market.
USD/bbl
75
Nov '18 60
Sep '18
©2018 ICIS
Graph 2
U.S. Crude Oil Stocks (million barrels)
90
580
5 year range
weekly
540
85
500
80
460
75
420
380
70
340
65
300
260
Dec '16
60
Jun '17
Dec '17
Jun '18
Dec '18
Source: U. S. Energy Information Administration
Graph 3
U.S. Crude Oil Futures Price Contract 1 (dollars per barrel)
80
50
2016-17
20
Dec
Mar
Jun
2017-18
Sep
Dec
Source: U. S. Energy Information Administration, New York Mercantile Exchange (NYMEX)
15
ILMA Compoundings – January 2019
Table of Contents for the Digital Edition of ILMA Compoundings – January 2019
Letter From the Ceo
Inside Ilma
What’s Coming Up
Industry Rundown
In the Know
International Insight
Market Report
Business Hub
Counsel Compound
In Network
Member Connections
Portrait
ILMA Compoundings – January 2019 - Cover1
ILMA Compoundings – January 2019 - Cover2
ILMA Compoundings – January 2019 - 1
ILMA Compoundings – January 2019 - 2
ILMA Compoundings – January 2019 - Letter From the Ceo
ILMA Compoundings – January 2019 - Inside Ilma
ILMA Compoundings – January 2019 - 5
ILMA Compoundings – January 2019 - 6
ILMA Compoundings – January 2019 - 7
ILMA Compoundings – January 2019 - What’s Coming Up
ILMA Compoundings – January 2019 - 9
ILMA Compoundings – January 2019 - Industry Rundown
ILMA Compoundings – January 2019 - In the Know
ILMA Compoundings – January 2019 - International Insight
ILMA Compoundings – January 2019 - 13
ILMA Compoundings – January 2019 - Market Report
ILMA Compoundings – January 2019 - 15
ILMA Compoundings – January 2019 - 16
ILMA Compoundings – January 2019 - 17
ILMA Compoundings – January 2019 - 18
ILMA Compoundings – January 2019 - 19
ILMA Compoundings – January 2019 - 20
ILMA Compoundings – January 2019 - 21
ILMA Compoundings – January 2019 - 22
ILMA Compoundings – January 2019 - 23
ILMA Compoundings – January 2019 - 24
ILMA Compoundings – January 2019 - 25
ILMA Compoundings – January 2019 - Business Hub
ILMA Compoundings – January 2019 - 27
ILMA Compoundings – January 2019 - Counsel Compound
ILMA Compoundings – January 2019 - 29
ILMA Compoundings – January 2019 - Member Connections
ILMA Compoundings – January 2019 - 31
ILMA Compoundings – January 2019 - Portrait
ILMA Compoundings – January 2019 - Cover3
ILMA Compoundings – January 2019 - Cover4
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