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Base Oil Output Fell Back in August


Base oil production in the United States dropped to 4.6 million barrels in August, according to newly released government data, interrupting two consecutive months of recovery from impacts of the COVID-19 pandemic.

The latest production figure was 20% lower than the average level for the previous five Augusts, based on data from the U.S. Energy Information Administration. This year’s July and June totals were 17% and 22% below their respective running five-year averages, which reflected improvements from May’s 25% deficit, the nadir since the pandemic began in terms of year-to-year comparison.

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Production totals had also been recovering in terms of raw numbers. The nation’s refiners made 4.1 million barrels of mineral base stocks in May, 4.3 million barrels in June and 4.9 million barrels in July.

The decline in August came from the paraffinic side of the market. Refiners produced 3.9 million barrels of paraffinic base oils that month, 21% less than the running five-year average. Output of naphthenic base oils was 716,000 barrels – just 10% less than the running five-year average.

U.S. base oil production has fallen this year because of declines in lubricant demand caused by economic lockdowns and decreases in driving. Industry insiders worry that demand could fall again if a resurgence of the coronavirus causes segments of the economy close again. European countries are reinstituting lockdowns due to new waves of cases within their borders.

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