Referring to combined results, Nynas said, Lower earnings are mainly due to lower margins on naphthenic specialty oil products due to high value inventory and lagging market prices from first quarter crude price impact.

Net sales for Nynas naphthenics business unit fell to 1.5 billion krona, down 42.3 percent from 2.6 billion krona.

Second quarter external sales decreased to 1.5 million, down almost 31 percent from a year earlier, which the company deemed a consequence of lower oil price levels. Margins decreased, squeezed between the relatively more expensive raw material costs, sourced from crude purchases at higher oil market prices, and the relatively lower sales prices, influenced by the lagging oil market due to the low crude oil prices during the first quarter, Nynas stated.

Naphthenic sales volumes in the second quarter were up 8 percent from the same period in 2015. Europe, along with Asia, the Middle East and Africa, experienced strong sales volume growth compared to a year earlier. This was driven by volume growth across the whole of Europe, and in direct sales, especially China, India and Southeast Asia, the company said.

Sales volumes in the Americas for the second quarter decreased compared to 2015s second quarter. Sales increased in Brazil and Canada, remained steady in Mexico, but decreased in remaining countries, Nynas noted.

Nynas operates a plant in Nynashamn, Sweden, with 7,600 barrels per day of naphthenic base oil production capacity. The companys Harburg, Germany, plant has capacity to make 6,300 b/d of naphthenic base oil.

Neste Oil and Petroleos de Venezuela S.A. (PdVSA) are co-owners of Nynas, which has a long-term marketing agreement to sell naphthenic base oils produced by the Refineria Isla refinery operated by PdVSA in Emmastad, Curacao. That plant has 3,700 b/d of naphthenic capacity and 5,000 b/d of paraffinic Group I capacity.