The report uses 2002 as the base year. An index value of 100 represents the average quarterly volume for 2002. The 2007 second quarter index value was 90 (i.e., sales were 90 percent of the 2002 average), compared to 97 for the second quarter of 2006.

The automotive segment saw the steepest decline, falling 7.7 percent to 90.7 in the second quarter, compared to 98.3 in 2006s second quarter. Increases in recommended oil drain intervals on passenger car automobiles is one likely factor, said Stephen Ames, of SBA Consulting in Pepper Pike, Ohio. Ford has recently gone from 5,000 to 7,500 miles on their new cars which, if you look at it, is a 50 percent reduction in the amount of oil that would be consumed in those cars if indeed the owners go by the OEM recommendations, Ames told Lube Report. Todays high fuel prices may be another factor, he said, as it may cause people to cut back on the amount of driving they do.

Grease sales fell 6.9 percent to an index value of 83.1 in the second quarter, compared to 89.3 a year earlier.

Industrial lubes dropped 6.9 percent to 91.9 in the second quarter, compared to 98.8 in the second quarter of 2006. I think youve seen a lot of heavy industries, which are the biggest consumers of lubricants – especially metalworking lubricants – move those operations to cheaper countries such as China, so you would expect that to go down, Ames said. Heavy industrial activities going down means lubricant usage goes down.

The index for industrial process oilsaw the smallest decline, edging down 5.3 percent to 86.1 in the second quarter, compared to 91 in the year-earlier period. Ames noted that process oils sales in the United States are heavily tied to the rubber industries, which generally are not growing here. Imports of rubber products are growing, he said.

Ames said there is growth in transformer oils. But is there growth in the U.S.? he asked. Or are those base oils being exported to other countries where the transformers are being put together, and not registering in the QUILS report? Which I suspect is happening.

According to the NPRA report, the U.S. Energy Information Agency reported output of paraffinic and naphthenic base oils totaled 17.6 million barrels during the second quarter, up 0.2 percent from the same period in 2006.

Wax production for the quarter totaled 1.1 million barrels, down 25.8 percentfrom the second quarter of 2006.

NPRA emphasizes that its quarterly reports are meant to be used as a gauge of market trends, rather than a measurement of total sales, because relatively few marketers participate. The association member companies that report quarterly data are refiners as well as marketers, representing more than 72 percent of the lubricants volumes reported for the associations more comprehensive annual report on lubricating oil sales.