Market sources say ExxonMobil has decided to close its West Coast base oil terminal in San Pedro, Calif., a move that removes one of the few remaining local supply points for lubricant blenders.
ExxonMobil officials were unavailable for comment yesterday, but outsiders told Lube Report that the company formally closed the terminal Feb. 1. Dwindling volumes of some products are still available at the site, but the operation will close completely once they are gone.
The terminal, which sold orders delivered to customers by truck load, was the only source in the region for paraffinic Group I oils. Area blenders wanting truckload volumes said they will now be forced to purchase them from Chevrons Group II plant in Richmond, Calif.
What it does is force companies to buy a product thats priced 15 to 20 cents per gallon higher, even if the application doesnt warrant use of a Group II, one buyer said. Its a sign of the times, but were going to miss that terminal.
Other blenders already buy larger Group I volumes delivered by rail from ExxonMobil and other producers outside the region. Some said they will continue to do so and are unaffected by the terminals closing.
Chevrons Richmond plant and San Joaquin Refinings naphthenic plant in Bakersfield, Calif., are the only base oil plants west of the Rocky Mountains. ConocoPhillips and SK both sell Group III oils at California terminals.Rerefiners Evergreen Oil in Newark, Calif., and Newalta inNorth Vancouver, British Columbia also serve the West Coast.
Posted prices for paraffinic oils were unchanged this week. The price of crude oil on the New York Mercantile Exchange closed yesterday at $59.41, according to Bloomberg. That was $3.59 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.