After being closed for more than three months in the wake of Hurricane Rita, ExxonMobils Beaumont, Texas, base oil plant was to begin the process of restarting this week, market sources said.
Sources said the company indicated last week that it planned to initiate start-up procedures over the weekend and ramp up toward full production during the next several days. An ExxonMobil spokeswoman declined to comment yesterday.
Observers called the development welcome news for an industry still trying to replenish supply chains that were severely depleted by the September storm. The Beaumont plant has capacity to make 12,500 barrels per day of Group I oils.
Its going to be difficult to loosen up the market until that capacity is back online, one buyer said.
ExxonMobils was one of four base oil plants sidelined after Rita struck the U.S. Gulf of Mexico Coast Sept. 24. Together they accounted for 42 percent of paraffinic base oil capacity in the United States. The other three plants resumed operations during the second half of October.
ExxonMobil has declined to discuss the reasons behind Beaumonts prolonged closure, but market sources say it was at least partly due to the companys inability to conduct scheduled maintenance work after the hurricane.
Posted prices for paraffinic base oils were unchanged this week, but crude oil prices climbed. The price of crude on the New York Mercantile Exchange closed yesterday at $62.92 per barrel, $5.14 higher 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.