The report uses 2002 as the base year. An index value of 100 represents the average quarterly volume for 2002. The 2007 third quarter value was 89.4 (meaning sales were 89.4 percent of the 2002 average), compared to 90.7 for the third quarter of 2006.

The exception was the process oils segment, which rose 5 percent to 90.4 in the third quarter, compared to 86 in 2006s third quarter. Year-to-date, process oils declined 2 percent to 87.2, from 88.9 during 2006s first three quarters.

Paraffinic process oils are used by the additive companies, and additive demand has been up because of changes in finished lube formulations globally, said Stephen Ames, of SBA Consulting in Pepper Pike, Ohio. New finished lube specifications such as CJ-4 in North America and ACEA in Europe require the use of more additives.

Since all four of the largest additive companies have major manufacturing operations in the U.S., that possibly explains the increase in process oils over the previous year, Ames told Lube Report. Their additive sales have generally been up in the third quarter versus the year ago period.

The rubber, ink oil and transformer oil industries also make use of process oils, he explained. I would also say the transformer oil market in Asia, as well as rubber markets there, are taking advantage of exports from the U.S., Ames said. Transformer oils are being generally made from naphthenics. Since most of the naphthenic capacity still resides in the U.S., the growth in use of transformer oils which is used for electrification of the areas – growth of the electrical grid – most of that comes from the U.S. currently.

Grease sales volumes fell 8 percent to 80.7 in the third quarter, compared to 87.8 in 2006s third quarter. Year-to-date through the third quarter, grease declined 8.8 percent to 79.2, compared to 86.8 through 2006s first three quarters.

Ames said much heavy industry that makes use of larger quantities of grease is migrating to offshore areas such as China and India. While demand is down here, its generally a regional issue that shows heavy industry is not as robust in the U.S. as it was in years past, he said. I dont think thats going to surprise anybody.

The automotive segment slid 2.3 percent to 87.9 in the third quarter, compared to 89.9 a year earlier. Year-to-date through the third quarter it slipped 5.4 percent to 89.9, compared to 95 through 2006s first three quarters.

Fewer miles driven due to higher priced gasoline is one factor, Ames said. Others include longer oil change intervals as recommended by original equipment manufacturers, new oil change indicators in newer cars that generally extend the life of oil over previous recommendations, and a number of marketers actively marketing longer oil drain intervals. Those things seem to be taking a toll on the demand for automotive lubricants in the U.S., he said.

Industrial lubes declined 3.9 percent to 94 in the third quarter, compared to 97.8 in 2006s third quarter.

According to the NPRA report, the U.S. Energy Information Agency reported output of paraffinic and naphthenic base oils totaled 16.4 million barrels during the third quarter, down 4.6 percent from the same period in 2006.

Wax production for the quarter totaled 1.2 million barrels, down 9.1 percent from thethird 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.