Base Oil Price Report


Chevron has decided to postponea maintenance shutdown that had been scheduled for October at its base oil plant in Richmond, Calif., market sources said. The company told customers recently that it will now conduct the turnaround late in the fourth quarter.

Meanwhile, Lyondell Chemical Co. announced last week that it and Citgo Petroleum Corp. have decided not to selltheir jointly owned Houston refinery that includes a 4,600-barrel-per-day base oil plant.

Chevron declined to publicly discuss its maintenance plans for Richmond, but its decision is good news for buyers in a market that is still struggling to recover from a series of supply disruptions during the past year. The postponement will delay the temporary idling of a plant with capacity to make 15,000 barrels per day of Group II and Group III stocks. It also gives Chevron more time to build inventories so it can continue supplying customers during the shutdown.

The Lyondell-Citgojoint venture, Lyondell-Citgo Refining LP,operates a 268,000-barrel-per-day refinery in Houston, which includes a base oil plant with capacity to make 1,000 b/d of Group II paraffinics and 3,600 b/d of naphthenics.In April the partnersput the refinery on the block, but Lyondellnow says theyhavedecided not to sell to a third party, despite receiving offers of more than $5 billion.

In a statement issued Thursday, Lyondell cited several factors, including profitability of refining, earnings and cash-flow considerations, and synergies with Lyondells chemicals business. It added that the partners are evaluating alternatives, including Lyondells acquisition of Citgos stake and keeping the joint venture intact. They expect to announce a decision soon.

Lyondell, operating partnerof therefinery with a 59 percent stake,is North Americas third-largest independently owned, publicly tradedchemical company, while Citgo, with 41 percent of the refinery,is the U.S. subsidiary of Venezuelas PDVSA. Both partners are based in Houston.

Posted prices in the United States for paraffinic base oils were unchanged again this week. The cost of crude oil on the New York Mercantile Exchange closed yesterday at $73.89 per barrel, Bloomberg reported. That was 8 cents higher than the price 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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