ExxonMobil confirmed yesterday that it implemented sales controls on bright stock because it is in the midst of a turnaround at its Baytown, Texas, refinery. In a separate incident unrelated to bright stock allocations, a platinum reformer unit at ExxonMobils Beaumont, Texas, refinery was down for repairs last week, but returned to normal operations this past weekend.
Sales controls have been implemented on AC-2500 bright stock to help ensure we meet our customer commitments, ExxonMobil spokeswoman Prem Nair told Lube Report. We look forward to establishing normal supplies as soon as possible. Baytown has 9,800 barrels per day of API Group I capacity and 11,700 b/d of Group II base oil capacity.
ExxonMobil customers said notification letters went out last week explaining the price controls. What weve been informed of is that theyre putting customers on an allocation for bright stock equal to 100 percent of their [the customers] forecast, one buyer told Lube Report. If you forecast the bright stock, theyre still committing to supply it, but only up to 100 percent of the volume forecasted – there are no incremental opportunities and no spot opportunities.
Separately, a leak occurred in the platinum reformer unit of ExxonMobils Beaumont, Texas, refinery on Dec. 11. The unit was taken down for repairs, and there was a temporary and minimal impact on production, Nair said. That unit has now been returned back to operation, and the refinery is back to normal operations. There is no connection between the unit outage at Beaumont and the bright stock sales controls, she added. Beaumont has 12,500 b/d of Group I base oil capacity.
Several other bright stock stories swept through the U.S. base oils arena this week. Multiple sources suggested that a Louisiana-based producer had more-than-ample availability of bright stock, and the supplier was offering it at steeply discounted levels of around $3.02 to $3.06 per gallon FOB. Other U.S. Gulf Coast suppliers said that those levels are below market value, and they refused to compete.
In another situation, sources said that one large refiner, based in the U.S. Gulf Coast, might be contemplating exiting the bright stock business, ceasing production within the next few years. However, evidence of this rumor could not be substantiated.
Two other bright stock sellers confirmed that there was an uptick in customer orders this week. Buyers are said to have agreed to pay fair market value at around $3.25 to $3.35/gal FOB or higher, depending on volume and location of delivery.
Bright stock posted prices reign above the $4/gal mark. See chart below for further details.
Posted paraffinic prices remain unchanged this week. At the close of the Tuesday NYMEX session, light sweet crude settled at $90.08 per barrel, a gain of 6 cents over the $90.02 settlement reported last week.
George Gill contributed to this article.
Carolyn L. Green, based in Houston, can be reached directly at carolynlgreen@gmail.com.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.