Base Oil Price Report


Availability of naphthenic base oils in the United States tightened in recent weeks, at least in part because of problems encountered by several producers. Ergons plant in Vicksburg, Miss., is coping with expired parts in a hydrotreater. Cross Oils plant in Smackover, Ark., was hampered by an interruption to crude oil delivery, and San Joaquin Refining expected this week to resolve lingering problems at its plant in Bakersfield, Calif.

Everybody talks about the problems paraffinics have had, but from our standpoint, naphthenics have turned into a tougher deal at the moment, a lubricant blender said. You call any naphthenic producer right now, and they dont have oil to sell.

The paraffinic market is still recovering from an unprecedented series of disruptions that occurred from summer to winter. The scale of problems on the naphthenic side of the market has certainly been much smaller, but buyers and sellers agree they have taken a toll. Supply of high-viscosity pale oils is especially tight, they said, noting that San Joaquin makes a relatively large portion of heavy oils and that Ergons problem is mostly affecting the heavy end of its production slate.

Ergon yesterday confirmed that hydrogen tubes in a hydrogen plant at Vicksburg went bad recently. The base oil plant continues to operate but at approximately 90 percent of normal levels. With capacity to make 11,300 barrels per day, the plant is the continents biggest source of pale oils. Ergon said it plans to replace the tubes by mid-June.

Cross said it was forced to curtail production at its plant for a two-week period near the end of last month because it was unable to obtain enough crude oil. Officials blamed a lack of barges used for transport on the Mississippi River. The company added, though, that the problem was resolveda week and a halfago, andthe plant is again operating normally.

San Joaquin conducted phased turnarounds on all three units at its Bakersfield plant this year and encountered difficulties that delayed the restart of two of them. Last week the company said it expected to restart the last unit – a heavy oil hydrotreater – this week. The company says it has a backlog of orders that will take several weeks to resolve.

Market sources said the tightness has particularly affected lubricant blenders in the southern United States who use naphthenics to make products such as bar and chain oils, SAE-30 motor oils and hydraulic fluids.

Posted prices for paraffinic base oilswere unchanged again this week. The price of crude on the New York Mercantile Exchange closed yesterday at $69.65 per barrel, according to Bloomberg. That was 92 cents 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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