ExxonMobil said late last week that site assessments are ongoing at Beaumont, Texas, and that it sustained some water damage. ExxonMobil’s giant Baytown, Texas, refinery and chemical complex is generating its own power and continues to make progress restarting, a company spokesperson said. ExxonMobils Beaumont plant has capacity to produce 10,000 barrels per day of API Group I base oils. Baytowns capacity is 9,800 b/d of Group I and 11,700 b/d of Group II.

A more severe situation is in store for Motiva. According to a letter issued to its customers, the company declared force majeure on Monday. Motivas 40,300 b/d Port Arthur, Texas, base oil plant was damaged by Hurricane Ikes Sept. 13 landfall. The company had already been on an estimated 85 percent sales allocation plan for several months, and has now revised its program to 50 percent for all Group II and II+ grades, according to buyers of Motivas base stocks.

In addition, given the damage at the Port Arthur facility, Motivas scheduled 45-day shutdown, which was to have commenced on Sept. 25, has been postponed until early next year.

Direct buyers of Flint Hills Resources said that this Group II supplier has issued a sales allocation plan of 50 to 75 percent of average volumes due to Hurricane Ikes disruptions at the 21,900 b/d Westlake, La., facility that Flint Hills co-owns with ConocoPhillips.

There is no word of allocations or other actions by ConocoPhillips. The Westlake facility was reportedly operating at reduced rates, but output is steadily rising. Several ConocoPhillips customers have reported that their shipments were on target.

On Sept. 15, Nynas, which markets the output from Lyondells 4,600 b/d Houston plant, announced allocations for U.S. domestic customers of 50 percent based on their actual purchases in the last three months. Nynas says it is now assessing any earlier announced allocations on a product-by-product basis, and will discuss with affected customers any delays or allocations to shipments for the remainder of 2008.

Paraffinic suppliers report that overall availability of all grades remains tight alongside robust demand. The sales allocation programs now under way are not helping, noted several base oil consumers. And despite crude oil prices moderating in the last month, base oil postings are unchanged and considered firm.

Several solvent neutral grades, mainly bright stock and light viscosity stocks were exceptionally tight, and buyers are paying top dollar or near posting.

Bright stock prices, including spot, contract and regular long-term business, are confirmed within an average range of $5.80 to $5.90 per gallon, FOB U.S. Gulf. East Coast prices are estimated to be slightly higher.

In the naphthenic arena, business is more or less back to normal, with most producers (with the exception of Nynas) reported to be in balanced supply positions. In a few cases, sellers have improved inventories and are therefore being slightly more competitive on pricing. Discounted prices were believed to have been in response to the recent news that San Joaquin Refining had lowered prices by 20 cents per gallon across the board. The company apparently adjusted pale oil prices in response to crude costs dropping from the high levels reported last month.

Looking downstream, lubricant additive producer Lubrizol was expected to restart its Deer Park, Texas, plant on Monday following a two-week shutdown caused by the recent hurricanes, analysts reported.

At the close of the Tuesday, Sept. 23, NYMEX session, light sweet crude futures settled at $106.61 per barrel, a substantial climb of $15.46/bbl from the week-earlier close at $91.15.

Carolyn L. Green, based in Houston, can be reached directly at carolynlgreen@gmail.com.

Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.