The United States base oil market continued its recovery in November, producing 5.4 million barrels of base stocks, which was 3% more than the average of the previous five Novembers. It was the first month in 2020 that output exceeded the running five-year average and served as another step back from the mid-year ravages of the COVID-19 pandemic.
The November total, reported by the U.S. Energy Information Administration, was also the highest monthly output in 2020, beating the October number of 5 million barrels by 8%. The October output was the previous best number compared to the running five-year average since the market was struck by the pandemic and countermeasures taken to contain it.
The market bottomed out in May, when base stock production was 25% less than the running five-year average for that month. After that refiners narrowed the gap fairly steadily until October’s output was just 8% less than the running five-year average.
Some market analysts worried that new waves of the coronavirus would cause lubricant and base oil demand to decline again, but the nation avoided widespread drastic countermeasures late in the year large increases in numbers of cases and limitations on activities in some areas.
The November performance in base oil production was mostly on the paraffinic side of the market. Refiners made 4.7 million barrels of paraffinic stocks that month, 4% better than the running five-year average. It marked the first time so far in 2020 that monthly output of paraffinic stocks ran ahead of the past five years.
The industry produced 789,000 barrels of naphthenic base stocks during the month, 6% less than the running five-year average. That was still significantly better than October, when output ran 11% below the five-year average. For the first 11 months of 2020 refiners produced 50.3 million barrels of base stocks, 14% less than the running five-year average for that period.