Aye sir, not SoCal but Oregon. This station used to supply R99, plus noticed a couple other things which made me ask. Kero would make sense.
April lubricants industry market update.
- Thread starter Foxtrot08
- Start date
Aye sir, not SoCal but Oregon. This station used to supply R99, plus noticed a couple other things which made me ask. Kero would make sense.
Sulfur is trading at around $950 a ton. Which is up… a lot.
So it makes some financial sense that they’re trying to strip more out.
ULSD is already 15ppm, so ~105lbs sulfur per million gallons of ULSD. I know nothing about the process but I'm surprised that's commercially viable.
I dunno. Not like I did a chemical analysis, just noticed a couple things that matched what I'd seen with R99 before. Car goes down the road, whatever it is.
Remember that’s 15ppm max.
Some of our fuel samples that we pull, we regularly see 5-7ppm. And that’s 15ppm max at the pump, not that there should be any chances of it getting extra sulfur between the refinery and the pump. But, just saying that refiners do make money out of their sulfur units.
When it was trading at $250 a ton… maybe not. At $900+ yeah…
Right, I should have said "already down to 15ppm". I guess when refiners are already doing whatever they do to pull out a huge chunk of sulfur, tuning the process to pull out every last bit doesn't take much more effort. Interesting.
Pretty wild r99 is that heavily subsidized to make it worth while up there. But, completely different market than mine.
I have thoughts on that but sharing them would immediately violate TOS. Any idea what $$/gal R99 is without the subsidy?
Just glad it's fantastic fuel and my Land Cruiser loves the stuff. Happy to run it.
Last time I got quotes for drums to be delivered in Ohio, which was last year, I was around $10 a gallon my cost.
But drum cost, freight, mark up, etc. is going to make that considerably skewed.
Yeah drums vs. bulk tanker delivery, not comparable.
Just saw this post on X (Twitter) -
I have no idea who this guy is or what he is saying is true:
Mobil and Shell have informed Costco and Walmart they have no packaged product to send them.
Maybe Foxtrot08 would know?
I have no idea who this guy is or what he is saying is true:
Mobil and Shell have informed Costco and Walmart they have no packaged product to send them.
Maybe Foxtrot08 would know?
@Foxtrot08 have you heard this?
I mean, this specifically. Nevermind the fact that you’ve been warning us this was coming for a while.
Last edited:
I wanted to keep this thread as “factual” but, I guess since this is out in the wild now. Yes.
It’s been confirmed to me by three major oil companies, that particularly Walmart was cut off. Which, makes sense that Costco is as well. I first heard about Mobil cutting Walmart off around 15-18 days ago. The Shell / Pennzoil part is of course going to happen, they don’t have base oil.
I didn’t want to be the one to openly spread any “rumors.”
Okay, (and so much for us in the DIY community) an obvious question arises: Will the dealerships (and hopefully the independent shops as well) maintain the priority for the remaining supply - or will they eventually get cutoff as well (if this goes on long enough)?
For passenger cars and trucks? Or just shortages?
Of course commercial and municipal-governmental fleets will always be at the front of the line.
So as the April update shows. This primarily hits full synthetics made up of your various group 3s. So your full synthetics 0w-XX products and your various 5wXX products. It will of course also impact your various full synthetic driveline products - ATFs, synthetic gear oils, etc.
Dealerships will absolutely be impacted. Truth be told, they will be on allocation if they’re not already on allocation. Now, allocation isn’t “cut off” but, it will be various degrees. Example, I’m a Honda distributor and I’m on allocation. Which, by default makes them on allocation. That being said, I’m at 100% allocation at this moment. So they’re at 100% allocation, at this moment. That’s where the facts stop and after that is speculation. Which, I’m trying to avoid completely.
What allocation means, currently. Your last 12 months of orders, combined, divided by 12. That’s what you’re allowed to order.
Which brands will be more impacted and what not, I can speculate. But, so can anyone else.
Now for HDEO.
What this does not directly impact as much, is group 2 products. Outside of your various “boutique” Xw-40 products and 5/10w-30 full synthetic products. Your main line HDEO are all blends with a splash of straight G2 products still in circulation. While on allocation as well, those should not be as heavily impacted as your above PCEO products. I don’t really fear of running out of a 15w40.
Most majors still have a “conventional” or straight Group 2 15w-40 somewhere in their portfolio of products. Whether it’s active or recently discontinued, which means it could be quickly spun back up into production. So, no real fear. You may not get the exact brand, or formulation. But you’ll probably get something suitable for use in these applications.
Now, as the dominos fall gets more into speculative territory. However, we are absolutely seeing a heavier pressure on group 2 oils now. As the group 3 market contracts due to lack of supply, people will buy group 2 products. Whether it’s industrial customers buying a conventional AW product over a synthetic AW product, or a consumer buying syn blend 5w-30 instead of a full synthetic.
This will drive the prices up and availability down. Which will lead to more allocations and such in the future. While speculative, it is just the math of supply and demand. We know 40% to 55% of the G3 market is currently not available. We know there’s pressure on the other group 3 producers outside of the impacted areas. These pressures include crude shortages, crude type changes, producing other products such as jet fuel, etc. So they could be producing less G3 base oils as well. Plus, global competition for the existing base oils.
All current reports - open source, Chevron CEO, XOM CEO, Shell CEO, points towards there being between 20 to 65 days of certain products left in the market place before extreme cut backs will need to be made. So how the group 2 products look now, may change. The group 3 outlook, from my stance, has become more dismal. The PAO outlook has also become more dismal as there’s more pressure on that market.
Just remember, there was never a lot of “excess” base oils in the market place to begin with. So removing the production of an enormous sum of them, will eventually lead to a shortage.
I won't repeat gossip, so listen closely the first time.
How much more margin does a blender make selling to Walmart than to a bulk distributor like your company?
How much Grp III finished product volume does Walmart represent nationally as opposed to that purchased by distributors like your company?
I guess I'm just thinking that if major blenders are willing to incur the wrath of Walmart then the situation must be truly dire. Along with that, their margins with Walmart may have been squeezed to the point that it makes more sense for them to walk away in an environment of constrained supply.
May not be a question of $$$ - one would think that commercial and government fleets, dealerships and independent shops would come before the mostly DIY community that Walmart serves. For example, who do you think services Walmart's trucks (hint: it isn't the DIY community)?
Being honest.
Any answer I give will be wrong. Selling to a national chain like that is not my wheelhouse. And I’d rather not public speculate on margins or profits.
OTOH, commercial and government fleet buyers are contracted at low margins.
They do undoubtedly represent a much greater volume collectively then would retail sales.
Still, rationing by price is a reality so I would expect blenders to give priority to the higher value markets.
There are good Grp II bases available for heavy duty truck engine oils, so it may not be a matter of supplying one or the other but more a matter of adequate Grp III supplies drying up.
I suspect that the Grp III based PCOM oils are probably going to be constrained for fleet buyers as much as they are for anyone else and the supply contracts probably include provisions for potential basestock supply shortages.
We may see a widespread resurgence in Grp II based PCMOs.
