U.S. supply of Group II-plus base oils has been tight for some time now, but market observers say it has tightened even further in recent weeks.
Some sources have attributed the shortage to a maintenance shutdown at ExxonMobils Baytown, Texas, refinery – the largest North American source of Group II-plus. ExxonMobil had originally scheduled the turnaround for last fall but postponed it until February because of concerns of a supply shortage. Customers said at the time that the company planned to build inventories so that demand could continue to be met during the shutdown.
Apparently things didnt work out that way, a source said.
Some observers have speculated that the further tightening of supply may have less to do with production than with increased buying.
My guess would be that a lot of people are stockpiling, another source said.
Crude oil prices demonstrated continued volatility during the past week. After falling more than 25 percent from its March peak to less than $28 per barrel, crude rebounded to more than $31 per barrel Monday, due to concerns of a prolonged war in Iraq and announcement of a strike by Nigerian oil workers. But prices dropped yesterday after Iraqi President Saddam Hussein failed to appear for a televised address and the strike in Nigeria was called off. Crude prices on the New York Mercantile Exchange dropped $1.26 to close at $27.98 per barrel.
Paraffinic base oil posted prices were unchanged the past week.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.
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