For the second consecutive month, base oil production in the United States was slightly higher in January than the running five-year average for that month, according to the information from the U.S. Energy Information Agency.
The data suggest that supply in the market had recovered from the impacts of the COVID-19 – at least until severe winter weather caused power outages that disrupted refinery operations in Texas.
The nation’s refineries produced 5.2 million barrels of mineral base oils during January, 1% higher than the average of the previous five Januaries. This came after December’s output of 5.4 million barrels, which was 3% more than the running five-year average for that month.
Prior to that, U.S. output had been declined by 8%-25% every month since the pandemic struck the country.
Industry sources said the picture may worsen again when EIA publishes its February statistics next month. Severe cold caused widespread power outages across Texas in February, and many businesses, including some refineries, were forced to close temporarily.
January’s output of paraffinic base oils was 4.4 million barrels, 1% higher than the running five year average. Production of naphthenic base oils dipped 2% to 797,000 barrels.
The refining industry suffered some of the greatest impacts during the pandemic as fuel consumption nose-dived, forcing refiners to sharply curtail operations. While demand for lubricants and base oils also decreased, scaled back refinery operations caused shortages of feedstock for base oil plants and base oil shortages leading to sharp price increases around the world.