By Tim Sullivan
 
It looked like Follow the Leader once again in the U.S. base oil market, as suppliers completed a round of price hikes begun two weeks ago by ExxonMobil.
 
The latest round showed a lack of consensus, however, about which grades have tightest supply. Some Group I refiners implemented larger mark-ups for lower viscosity stocks while others raised prices more for heavies.
 
ChevronTexaco raised its Group II posted prices by 5 cents per gallon May 28. Sunoco increased its Group I postings, adding 7 cents per gallon on 70 and 100 cuts while raising all others by a nickel. Citgo, another Group I supplier, followed the opposite pattern, marking up its 650 cut and bright stock by 5 cents but increasing prices for lighter stocks by just 3 cents.
 
Citgo’s move yesterday completed a clean sweep of price hikes by principal U.S. Group I, Group II and Group II-plus base oil suppliers since ExxonMobil raised its postings two weeks ago. This pattern has been typical the past few years, with other suppliers following ExxonMobil, the market heavyweight with 30 percent of U.S. paraffinic capacity.
 
The previous round of price hikes, which began in April, saw a break from that pattern and spurred speculation of a possible split in the market. First ExxonMobil raised its Group II-plus postings, then Group II suppliers increased prices before ExxonMobil led mark-ups for Group I stocks.
 
Market sources said this week that it’s too soon to say which pattern, if any, will prevail in the future. Some have predicted that Group II prices may begin to move separately from Group I as new motor oil standards shift demand to premium stocks.
 
“I really don’t know what’s going to happen,” one marketer said. “I’m not sure anyone does.”
 
Some marketers and buyers were also pondering why some Group I suppliers implemented bigger mark-ups for low-viscosity grades while other raised prices more for high-viscosity grades.
 
“I don’t know what to make of what ExxonMobil did,” one purchaser said. ExxonMobil had raised its Group I 75 and 100 postings by 7 cents while increasing all others by 5 cents. “Everything I had heard indicated that 100 was in surplus.
 
“Maybe they’re just trying to throw everybody off,” the purchaser added with a laugh.