Base Oil Price Report


U.S. base oil capacity was 7.8 percent lower at the beginning of 2004 than it was a year earlier, according to the latest statistics from the National Petrochemical and Refiners Association.

The 2004 Lubricating Oil and Wax Capacities report, released last week, pegged total U.S. capacity at 193,000 barrels per day as of Jan. 1 of this year, compared to 209,400 a year earlier. Most of the decrease was due the well-publicized closure of two base oil plants by Shell, but the report also revealed a capacity reduction of more than 2,000 b/d at Marathon Ashland Petroleums plant in Catlettsburg, Ky., and provided scale for ExxonMobils plan to begin producing Group II oils at its Baton Rouge, La., plant.

The U.S. market lost a combined 14,200 b/d of paraffinic and naphthenic capacity with the 2003 closings of Shells base oil plants in Deer Park, Texas, and Martinez, Calif. The next largest change was the drop in capacity at the MAP plant, although it actually occurred three years ago. In 2001, the company altered operating conditions at the plant in order to upgrade the quality of its base oils as the GF-3 standard for passenger car motor oils came to market. Those adjustments cut yield from 8,900 b/d to 6,700 b/d.

MAP did not report the change for 2002 because plant operators did not yet know the extent of the effect on production. Then, in its 2003 figures, 2,200 b/d of slack wax capacity was mistakenly counted toward base oils.

The report shows smaller changes at three other plants: a decrease of 800 b/d at American Refining Groups plant in Bradford, Pa., and increases of 500 b/d and 200 b/d, respectively, at ExxonMobils plant in Baytown, Texas, and Excel Paralubes in Westlake, La.

The report also states that ExxonMobils Baton Rouge plant will convert 2,000 b/d of production to Group II beginning in April. The company announced last year that it would upgrade the quality of its automatic transmission fluid base stock after a maintenance turnaround during the current quarter, but it had not said publicly what volume of capacity would be affected.

Copies of the 2004 report are available from NPRA. For information, call (202) 457-0480.

Base oil posted prices were unchanged this week. The price of crude oil on the New York Mercantile Exchange closed yesterday at $36.17 per barrel, $1.33 lower than 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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