U.S. Base Oils at Post-Covid High

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U.S. Base Oils at Post-Covid High

Base oil production in the United States rose 6% in April – another solid month as the industry gets off to its best start since before the COVID-19 pandemic. Refiners made 4.9 million barrels of mineral base oils for the month, up from 4.6 million barrels in April 2023.

April was the third consecutive month that production ran ahead of most corresponding months since the coronavirus pandemic began in late 2019, and this year’s output for February and March was far more than corresponding months over that period.

Through the first four months of the year, refiners churned out 19.4 million barrels of base oils, compared to 17.5 million barrels, 18 million barrels, 19.2 million barrels and 17.5 million barrels in 2020 through 2023, respectively. Over the preceding five years, production for the first four months of the year averaged 20 million barrels.

The year-to-year gain for this April’s output came mostly from the paraffinic side of the base oil market. Refiners made 4.2 million barrels of that type during the month, 9% from 3.9 million barrels in April of 2023. Naphthenic base oil production fell 9% from 789,000 barrels to 716,000 barrels.

April’s total base oil production was down 4% from the 5.1 million barrels in March, in line with seasonal patterns.

The dip could also indicate some API Group II producers with the ability to switch to Group III production did so during that time.

“Group III yields are much lower even when you use the same feedstocks,” said Gabriela Wheeler, Lubes’n’Greases’ base oil market reporter.

At the same time, base oil exports were up 20%, from 3.1 million barrels in April 2023 to 3.8 million barrels for the same month of this year. Imports were down 7.6% year-on-year to 1,502,000 barrels from 1,625,000 barrels in 2023.

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