At first glance, the latest report on U.S. lubricant sales volumes from the National Petrochemical and Refiners Association looks discouraging: a 2.9 percent decline in the first quarter of 2005, compared to the same period of 2004.
The good news is that demand would have increased slightly if not for a sharp drop in numbers for process oils. Moreover, the apparent decline in process oils may have more to do with data collection than with market trends.
The associations latest Quarterly Index of Lubricant Sales, released Aug. 9, shows total volume of lubricant demand in the United States off 2.9 percent for the first three months of the year. That bottom line includes a 17 percent decline in sales of process oils.
Industry observers questioned the accuracy of the latter figure. I certainly havent seen anything in the market that would explain or support a change like that, one process oil marketer said. I would think it has something to do with data collection.
NPRA officials suggested this may indeed be the case, noting that some significant suppliers of process oils do not respond to the quarterly survey, although they do respond to the associations annual Report on Lube Oil and Wax Sales.
Excluding process oils, first-quarter sales of lubricants and greases edged up 0.4 percent. Volumes in the automotive segment dipped 0.6 percent, but were more than offset by a 3.9 percent gain in the industrial segment. Grease sales fell 2.1 percent.
U.S. base oil production was 14.1 million barrels during the first quarter, down 6.8 percent from the year-ago period, according to data obtained from the U.S. Energy Information Agency. Beginning with the first quarter, the agency no longer breaks down base oil data between paraffinics and naphthenics.
NPRA notes that its quarterly surveys are based on responses from a limited number of suppliers and therefore should be used as in indicator of market trends, rather than a comprehensive assessment of the markets size.