Base Oil Price Report


U.S. base oil suppliers temporarily closed several Gulf Coast refineries in the face of Hurricane Lili last week, tightening supplies in the process.

Refineries that were closed included Motivas 22,000 barrel-per-day Group II plant at Port Arthur, Texas; the 21,300 b/d Excel Paralubes plant at Westlake, La.; and Citgos 9,500 b/d Group I plant at Lake Charles, La. Motiva was closed for three days, Excel Paralubes for a day and a half. A Citgo representative who confirmed that companys closure did not know how long it lasted.

In all three cases, the decisions to shut down were made before Lili struck land, when the storm carried a Category 4 hurricane rating. Forecasters said last Wednesday night that Lili was aiming at Port Arthur and that it looked to be the worst hurricane to hit the regionin 60 years. As it turned out, Lili diminished to Category 2 by the time it reached land.

Base oil suppliers said they would meet orders but that it will take at least several weeks and perhaps until the end of the year to make up for the lost production. Deliveries scheduled during the closures were delayed.

When youre talking about 20,000 barrels per day, thats a lot of catching up to do, one marketer said. Theyll be cranking up as much as they can.

Suppliers continued to warn about the possibility of further price increases, although hurricane-induced shortages were described as a small or negligible factor. More important, they said, is the high cost of crude oil and the squeeze it has put on margins. The price of crude on the New York Mercantile Exchange dropped 16 cents yesterday to close at $29.48 per barrel. According to sources, that has base oil margins 6 or 7 cents per gallon below their average for the past year.

It certainly seems to have become a trend to have a price increase every month, one marketer said. Why not raise them again?

There were no reported changes in posted paraffinic base oil prices this week.

Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.

Copyright 2002 LNG Publishing Co., Inc. All rights reserved.
Tim Sullivan, Editor. Lube Report, Lubes’n’Greases Magazine and Lubricants Industry Sourcebook are published by LNG Publishing Co., Inc.

Related Topics

Base Oil Reports    Base Stocks    Market Topics    Other