During an uneventful week for the U.S. base oil market, buyers and sellers were left to mull a reported delay in the next passenger car motor oil upgrade. Individuals from both camps said a postponement of GF-4 could slow a further shift in demand to premium stocks.
The Independent Lubricant Manufacturers Association told members Monday that the International Lubricant Standardization and Approval Committee has given up plans to have GF-4 motor oils available in the fall of 2003 for model year 2004 cars. The auto, oil and lubricant additive industries are still developing the specification but observers generally agree it will require blenders to use increased amounts of Group II, Group II-plus and perhaps even Group III base oils.
ILSAC had tentatively called for GF-4 to be adopted next spring but Group II marketers have said that motor oil blenders were already lining up suppliers. Some said yesterday that the push to do so may lessen if the GF-4 schedule eases.
There were certainly some people who were preparing to switch [from Group I] and this gives them a little breathing room, one marketer said.
A base oil purchaser contended that demand for premium stocks may not increase as much as some expect if GF-4 ends up not being compatible with engines built before its implementation date.
If it is backward compatible, you can expect a lot of [motor oil] marketers are going to switch over completely to GF-4, the source said. If that happens, its going to mean a big increase in the demand for higher quality base oils. If its not backwards compatible, the number of cars that use it is going to be such a small share of the market that a lot of companies may not switch.
A lot of things are still up in the air.
Paraffinic base oil posted prices were unchanged for the second consecutive week. Crude oil costs changed little, as the price of crude on the New York Mercantile Exchange closed at $25.43 per barrel yesterday, up a dollar from a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.
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