22 April 2008 23:47 [Source: ICIS news]
By Heather McGuire Doyle
HOUSTON (ICIS news)--Talk that US base oils producer Marathon was about to depart from the business sent ripples of concern over supply, industry sources said on Tuesday.
Four buyers and one seller overheard that Marathon could exit the base oils business before year end, they told ICIS news. Marathon did not reply to repeated attempts for comment.
Citing informal phone calls from ?xml:namespace>
Buyers expressed concern about securing sufficient low-viscosity base oils if the company leaves the market.
A Group I seller said that phone calls began to pour in this afternoon from buyers looking to secure supply over concern that
In a first quarter interim update,
The company projected its first quarter 2008 refining and wholesale marketing per gallon gross margin would be slightly negative. The company has not yet reported its earnings for the quarter.
According to National Petrochemical and Refiners Association (NPRA) production statistics,
Sellers have cited high feedstock prices for crude and vacuum gas oil (VGO) as a key reason to divert production from base oils.
Buyers had not been concerned about securing supply as the
But the possibility of Marathon's exit followed Citgo’s recent announcement that the company would reduce merchant base oils availability, raising concerns about scarcity.
Earlier this month, Citgo informed customers that it plans to reduce production at its
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