Supply and demand fundamentals continued to weigh on base oil pricing, as consumption levels have slipped due to seasonal patterns, while steady production at most refineries and the release of hurricane-related stockpiles resulted in ample availability of paraffinic grades. The turnaround at a major United States facility in October had a more limited impact than anticipated. On the naphthenic side, there has been a tightening of supply, propping up current values.
API Group II and Group III producer Motiva was expected to restart its plant in Port Arthur, Texas, early next week, following a scheduled turnaround that lasted one month and was completed on the unit that produces the Group II 600 neutral only. Despite the shutdown, the company did not place customers on allocation, and participants said that there had not been any shortages of product since the producer had built inventories to meet contractual obligations. The Group II 600 neutral grade had temporarily been snug, but the increase of production rates at a second U.S. Group II facility that had suffered setbacks in September helped relieve some of the tightness, sources said.
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