Marathons base oil plant in Catlettsburg, Ky., is scheduled to shut down for maintenance in October, and customers say theyve been told to expect interruptions in deliveries. Observers call it fresh evidence that the North American market has not yet recovered from an unprecedented series of supply disruptions.
The Catlettsburg plant has capacity to make 6,700 barrels per day of Group I stocks. According to market sources, Marathon plans to shut it down around the start of October and resume production a month later.
Customers say they received notice that September sales will be allocated and that Marathon expects inventories to run out before the plant restarts.
Like a number of other producers, they really havent been able to rebuild inventories, one source said. Theyve been making product to ship.
The industrys supply chain underwent several big shocks over the past year, including a hurricane that temporarily closed four plants and explosions that caused two serious disruptions. There have been no major incidents since spring, but buyers and sellers say they are still struggling to rebuild inventories and that base oil availability may not return to normal levels for months to come.
Posted prices for paraffinic base oils were unchanged again this week. The cost of crude oil on the New York Mercantile Exchange closed yesterday at $68.60 per barrel, according to Bloomberg. That was$1.33 lower 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.