The nations six naphthenic plants churned out 5.3 million barrels of oil during the first six months of this year, according to the federal Energy Information Administration. That was 14 percent ahead of output for the same period of 2005, and put the market on track to produce 10.6 million barrels for the full year 2006.

Refiners produced 12.3 million barrels of naphthenic oils in 2002, the last year before Shell Oil closed plants making pale oils in Deer Park, Texas, and Martinez, Calif. After that, output slumped to 9.7 million barrels in 2003 and 9.8 million in both 2004 and 2005.

Producers say they are making more naphthenic base oil as they struggle to keep up with demand. Indeed, sources say the naphthenic market is noticeably tighter than the larger paraffinic base oil segment, which helps explain why pale oil prices held steady when paraffinics retreated in September and October.

But despite the increased level of activity, naphthenic output is still significantly below nameplate capacity. The U.S. market has capacity to make 14.5 million barrels per year, according to the National Petrochemical & Refiners Association, meaning it will use slightly less than three-fourths of that capacity this year, based on the rate seen in the first six months. This seems a slack utilization rate, especially compared to the paraffinic market, which approached 86 percent of capacity during the first half of the year.

Sources say there are several reasons that naphthenic output lags so far behind capacity, from operational problems to scarcity of crude oils with high lube yields, to economic incentives to shift feedstock to other products. Whatever the reason, low refinery utilization rates appear to be the norm here. That means pale oil buyers are only teasing themselves if they use nameplate capacity as a basis for gauging their ability to obtain the barrels they need.