Base Oil Price Report


An Aug. 21 explosion at Petro-Canadas Lubricant Centre already appears to have tightened North American supply of Group II base oils – and the company has not yet announced a repair schedule.

Still, observers refrained from predicting whether a major disruption is in store, at least until they know how long it will take for normal operations to resume.

The explosion occurred as staff was completing the final steps to bring the Mississauga, Ontario, plant back online after a weeklong shutdown triggered by mid-August’s U.S. and Canadian power failures. Petro-Canada was able to restart one of the plants two production trains butonly is operating at half of its 12,500-barrel-per-day capacity. The train that is operating produces Group II-plus and Group III stocks, while the other produces Group II.

Petro-Canada officials could not be reached for comment yesterday, but market sources said the company has not yet said what caused the explosion or how long it will take to repair the damage. Some sources said the delay raises speculation that the damage may be extensive.

Certainly no news is bad news, one base oil buyer said. He and other sources said the problems at Petro-Canada already seem to have snugged up the Group II market, with one remarking that export availability has dried up the past two weeks. Petro-Canada has acknowledged purchasing from other suppliers to meet its own orders.

Observers also noted that Group II supply has been tight for much of the year because of production disruptions at several refineries. Still, buyers and sellers said it is too early to say whether the incident in Mississauga will seriously crimp the market.

I think its just impossible to say until we know how long that train is going to be out, a marketer said.

Base oil posted prices were unchanged this week. The cost of crude oil on the New York Mercantile Exchange closed at $29.56 per barrel yesterday, down $2.46 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.

Related Topics

Base Oil Reports    Base Stocks    Market Topics    Other