Lubes are the new Fuel. What's up with all the price changes?

Posted by Kelly Burke on Aug 2, 2021 10:51:51 AM

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Since December of 2020, we have seen an unprecedented SIX price increases roll out on base oil, additive & finished lubricant products. Now we are additionally seeing essentially all major suppliers move to allocations on products because of increasing difficulty on supply/sourcing.

So what is going on? 

Like most things in 2021, a lot of the issue started with the Pandemic & its after effects. When shutdowns went into effect in March 2020, demand for finished products crashed and that led to cuts in production volumes by producers, and the simultaneous drop in fuel demand led to a drop in refining, which caused a drop in the ability to source products for lube production that derive from fuel refining... and so on, like dominos. 

Once things came back online, the freak ice storms in Texas that derailed refineries once again slowed the access to lube production products. 

As soon as that was sorted,  demand  in the US roared back much faster than anticipated on both fuel & lubricant products as the world began to open back up.  This essentially created a situation where production was not able to come back online fast enough to meet suddenly skyrocketing demand. 

This has led to unofficial allocation levels for nearly all distributors across the country, as companies from major suppliers to independent blenders struggle to access the supply required to service their customers properly. 

To add another layer of frustration, the labor shortage in the transportation industry (read about that here: All Eyes on the Growing Driver Shortage )  means that even in the event that product CAN be sourced adequately, it is increasingly difficult to secure delivery, even at higher than standard freight rates. 

Long story short, the Pandemic, Economic Rebound, and Labor Shortages have essentially created a "perfect storm" where the fundamentals of supply and demand are pushing lubricant, additive, and base oils skyward. Optimists in the field hope supply issues will be remedied by the end of the summer, but with talk on the horizon of yet another increase in September, it seems doubtful that will be the case. 

We will keep you apprised of any major changes in the supply and pricing picture going forward. Hang in there, everybody.  

 

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Topics: Price Increase, Fundamentals, Lubricants, Additives

Finally! A truly global Antifreeze!

Posted by John Presti on May 14, 2012 1:12:00 PM

We're excited to announce that we now stock Peak Global Extended Life Yellow Antifreeze & Coolant. This Antifreeze is for all applications - heavy duty, light duty and automotive. Finally, no more stocking multiple products for multiple uses!

For spec info on this global antifreeze click here

For pricing info, fill out the contact form to the right, call 800-289-2875, or email us at lubeorders@burkeoil.com

Large yellow barrels of Global Antifreeze

 

Dont forget - May 25th is the last day to order lubes before the price increase!

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Topics: product of the month, New Product, Price Increase, Lubricants, Yellow Antifreeze

Another DEF Price Increase???

Posted by John Presti on May 2, 2012 1:18:00 PM

Spring is not looking to be a very fun month for lubricant decision makers out there.  We just had the industries FIRST price increase on diesel exhaust fluid last month; We in the process of having this year's first finished lube price increase; NOW, diesel exhaust fluid is going up again.

My suggestion, buy NOW and stock up!  But do not stock up too much.  DEF (pending on the surrounding tempatures) has a shelf life of 2 years.

Feel free to give me a call if you have any questions. (617-884-7800)

We did a previous entry running through what drives these type of price increases, specifically the April 2012 increase on DEF - if you want to read the entry to get some background info, Click here to read about the Urea Price Increase

 

 

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Topics: DEF, Price Increase, Diesel Exhaust Fluid, Urea

Lubricants Prices Increasing (update)

Posted by John Presti on Apr 30, 2012 9:28:00 AM

Just a quick update on the increase in finished lube prices we mentioned a couple days ago - almost every supplier is going up anywhere from .30 to .40 cents per gallon.  (Heres a link to the updated info US Base Oil Prices - Lube Report)

Dennis K Burke will be increasing affected lube products on May 15th 2012. If you know you'll need supply, you can place an order before May 15th at 1-800-289-2875 or via email at lubeorders@burkeoil.com and beat the increase.

Thanks!

 

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Topics: Price Increase, Lubricants

Finished Lubricants Prices Going Up Again?

Posted by John Presti on Apr 20, 2012 11:53:00 AM

It looks like we will all be absorbing another pricing increase 30 days for now in the finished lubricant market. Most majors Like Shell, Warren, Peak, Cam2 and Smittys have already announced that they will be participating.  I predict some of the other majors such as CITGO, Castrol and ExxonMobil will soon follow.   

Check out the link to “Jobbers World”  (http://www.jobbersworld.com/) that can help you monitor this situation. (Its also a great site to favorite to follow trends in the Petroleum Industry overall)

This chart from Jobbers World is a neat snapshot of % in price changes over the past ten years:

PCMO pricing changes

If you have an questions or concerns regarding the upcoming lube price increase, please contact me at 857.241.9678 or email me at john.presti@burkeoil.com

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Topics: Price Increase, Lubricants, Jobbers World

UREA Price Increases Ahead

Posted by John Presti on Apr 1, 2012 9:13:00 AM

UREA price increase is happening in April 2012, so all distributors and end users of diesel exhaust fluid (DEF) will be effected. If you are a DEF user, please call DKB today to get your latest price.

If you are curious...

Urea (fertilizer) is mainly used in the agriculture market and changes in the agriculture market, including rising natural gas prices, availability, and global agricultural factors have impacted price over time. Urea price is highly dependent on natural gas pricing, so when natural gas increases, urea follows. Because of its primary agricultural use, Urea is traded as a global commodity, and therefore liable to fluctuate with global conditions.

For a general run down on DEF, click here

For a general rundown on Urea, this website has a great explanation of what it is, why theres a global market, and how pricing works http://www.agrotainturf.com/QandA.php 

 

urea commodity price DEF

(The above chart shows urea fluctuation over the past year... Chart is from IndexMundi.com - great resource on commodity movements)

 

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Topics: Commodities, DEF, Price Increase, Urea

Don't Shoot the Messenger

Posted by Kevin O'Leary on Apr 26, 2011 8:36:00 PM

It looks as though there will be a third national lubricants price increase between mid-May and June.  The typical suspects are to blame:  raw materials, packaging, additives, transportation, etc.  The new wrinkle being put into play is the A word:  Allocation.  Many oil companies have instituted limits on orders based upon a percentage of their yearly purchases and suggest that product shortages could exist.

At Dennis K. Burke Inc, we cannot control the price but we have a stable supply of  Fleetline Products for all of our current and future customers.  Unlike our competitors, we have no delivery or fuel surcharges.  To find out how we can save your operation money, call me @ 617-819-3206.

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Topics: Price Increase, Allocation