Base oil production at Petroleos de Venezuela S.A. appears to be returning to normal levels – and Group I buyers in the United States are relieved.
Venezuelas national oil company is the largest base oil supplier in Latin America, but production was choked by a strike last December. Naphthenics production at the companys Refineria Isla, in the Netherlands Antilles, returned to normal levels not long after the strike ended in February. But production of paraffinics – which accounts for half of the refinerys 8,000-barrels-per-day base oil capacity – has lagged and, according to sources, is just now returning to normal levels.
Im very pleased to see it, said one U.S. base oil purchaser, noting that ExxonMobil has reportedly been exporting Group I base oil to Latin America to help cover shortages in that region. If ExxonMobil stops backfilling down there, it should loosen up supply in this market.
PdVSAs second-largest base oil refinery, at Cardon, Venezuela, has capacity to produce 5,300 b/d of paraffinics. Sources said it is taking even longer to resume normal operations because Venezuelas government fired most of the refinerys workers, leaving it in the hands of replacements who are less familiar with the facilities. Employees at Refineria Isla did not lose their jobs. PdVSA also operates a refinery at Amuay, Venezuela, with capacity to produce 1,500 b/d of paraffinics.
Crude oil costs on the New York Mercantile Exchange closed yesterday at $29.15 per barrel, up 61 cents from a week earlier. Posted prices for paraffinics in the United States were unchanged this week.
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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