More Third Round Price Increases

More Third Round Price Increases

Sinclair Lubricants was the first to move with a third round of price increases for 2018 when it announced on May 8th it will be implementing a price increase of up to 10% to 12% on finished lubricant products effective July 1, 2018. Click for details.

Now there are two more with a third round of price increases.

Advanced Lubrication Specialties (ALS) announced today it will be implementing a price increase on most finished lubricants between 4 and 6%. The increase goes into effect on June 4, 2018. ALS attributes the price change to the continued increases in the base oil market.

Sunoco Lubricants announced today that effective June 4, 2018 it will be implementing a price increase on most finished lubricants between 4 and 6%. Sunoco also attributes the price change to the continued increases in the base oil market.

Watching the Spread

The price spread between crude oil (WTI) and base oil (100N Group II) averaged $1.30 a gallon from January 1, 2017 to May 15, 2018. What this means is that if crude was trading at $x/gal, on average, base oil would sell for “x” plus $1.30/gal during that period. Generally, for base oil producers, the greater the spread the better the day. This is because when the spread is high, base oil producers enjoy higher margins. When it’s low, not only do they see lower margins, they feel pressure from their upstream refining businesses to increase the price of base oil or run the risk of alternative value economics favoring the use of base oil feed to produce fuels rather than base oils.

Base oil spreads are important to watch. The spreads provide lubricant blenders and marketers with a predictive tool to forecast movements in base oil and finished lubricant prices. In some respects, spreads can be looked at as an early alarm. Because when the spread drops below a certain threshold, we typically see base oil prices increase, which in turn, result in price increases on finished lubricants.

There have been two periods with notable increases in the crude and base oil spread in 2018, as shown below. These were accompanied by a number of base oil price increase announcements and, not surprisingly, they were followed by announced increases in the price of finished lubricants.

CrudePic5162018

Gen III Oil Corp. Announces Initial Analyst Coverage Report by Canaccord Genuity Corp.

Gen III Oil Corporation announced that Canaccord Genuity Corp. “Canaccord” – a Vancouver, Canada headquartered investment dealer, has published an initial equity analyst research report on the Company.

The research report dated May 10, 2018, entitled “Gen III Oil Corporation. – Initiation of Coverage: An industry-disrupting oil change.” was written and produced by Associate Analyst, Kimberly Hedlin, CPA, CMA, as an independent analysis of Gen III’s activities and progress. Click for More

On the Wire and In the News

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