Disrupted by severe cold weather in Texas, base oil production in the United States fell back in February following two months of matching levels that preceded the COVID-19 pandemic.
The nation’s refineries produced 2.8 million barrels of mineral base stocks in February, according to the latest data from the U.S. Energy Information Agency. That was 24% less than the average for that month over the previous five years.
“We knew that February [production] took a hit,” said one base oil marketer, who asked not to be identified. “The market has made good progress bouncing back [from the pandemic], but the impact from those power outages was pretty severe.”
Electricity supply across much of Texas was disrupted for several days in mid-February by an unusual weather pattern causing temperatures to plunge to levels that are quite rare for the area. The outages caused temporary closings of many businesses, including oil refineries. The largest share of U.S. base oil capacity is clustered along the Gulf of Mexico coast.
In terms of raw numbers, February also had the lowest national base oil output in 2020. In comparison to the running five-year average, production experienced its 2020 nadir in April, when production of 4.1 million barrels was 25% less than the five-year average.
U.S. output was down throughout the pandemic until recovering to run 3% ahead of the running five-year average in December and 1% higher in January.
Refiners produced 2.8 million barrels of paraffinic base stocks in February, which was 24% less than the running five-year average. Naphthenic base oil output was 608,000 barrels, down 11%.