The U.S. base oil market had good news on the supply and transportation fronts this week. Ergons Vicksburg, Miss., naphthenic plant emerged a week early from whatwas scheduled to be a month-long shutdown for maintenance and expansion. In addition, barge traffic on the upper Ohio River was expected to return to normal after salvage companies finished removing sunken vessels that had disabled dams and docks since Jan. 6.
Ergons plant in Vicksburg was the continents largest source of pale oils when its turnaround began Jan. 8, and is even bigger now. Besides performing maintenance work, the company increased capacity 11 percent to 350,000 barrels per month. The company said it continued meeting deliveries during the shutdown.
Officials also said they expect the expansion to provide a bit of slack for the heavy end of the naphthenic market – at least temporarily. They predict demand from tire manufacturers will increase within 18 months. Supply of lighter grades of naphthenics remains tight, even after a slow January, sources said.
Barge transportation of base oils, lubricants and other materials had been restricted or halted sincemid-January because of four barges that sank inside the Belleville Locks and dam near Belleville, W.Va., some 200 miles downriver from Pittsburgh. The barges prevented dam gates from closing, allowing water levels in the barge channel to sink too low for traffic over a 40-mile stretch of river.
The location of the barges complicated salvage efforts, which were further delayed by inclement weather, but the Huntington, W.Va., District of the U.S. Army Corps of Engineers reported yesterday that the gates had been cleared and that the locks were operating again. It said water levels would be back to normal by afternoon and that navigation conditions would be normal by the end of the week.
Posted prices for paraffinic base oils in the United States were unchanged again this week. The price of crude oil on the New York Mercantile Exchange closed at $49.45 per barrel yesterday, the same price as a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.