Motiva and ExxonMobil to Increase Base Oil Posting
Motiva Enterprises announced an increase in the posted price of its base oil. The API Group IIs (aramcoPRIMA 100, 220, and 600) will increase by $0.30 a gallon, and Group III (aramcoULTRA 2,3,4,6, and 8) will move up by $0.15 a gallon. The adjustments are effective on September 15, 2023.
ExxonMobil advised blenders it will increase base oil postings, effective September 20, 2023. The posted price of API Group I AC 100, 150, 600 and SN 115, 150, 330, 400, and 800 will be lifted by $0.20 a gallon. Group II EHC 45 and 120 will move up by $0.20 a gallon, and EHC 65 will increase by $0.15 a gallon. The posted price of AC 2500, and EHC 20L will remain unchanged.
While 2023 started with three announced decreases in the posted price of base oils (see graphic below), the Motiva and ExxonMobil adjustments are the second time this year when there has been an announced increase in prices. A first round of base oil price increases occurred last month when producers announced an increase in posted prices ranging from $0.20 to $0.50 a gallon, depending on type and grade.
Although it’s common to see finished lubricant prices respond to increases in base oil prices, there were no upward movements in finished lubricant prices observed since the base oil price increases seen last month. This was not surprising considering the soft demand and intense competition since the start of the year. Now, however, some will be facing tough decisions considering that this most recent increase will layer on another 20 to 30 cpg to the cost of base oil used in many finished lubricants, in just over a month.
Adding to the cost burden, U.S. inflation accelerated to 3.7% in August. The increase was primarily due to higher energy prices, including the fuel consumed by blenders and marketers for in- and outbound freight. Further, some blenders recently received word that the cost of packaging will be going up in October due to the higher cost of resin.