03 December 2010 15:57 [Source: ICIS news]
NEW YORK (ICIS)--Global base oil demand improved consistently each month in 2010 because the economy began to recover and buyers were quick to restock depleted inventories following a record low in 2009, US industry experts said on Friday.
“Base oil demand, which is mostly tied to the automotive market, collapsed to its lowest level in 25 years in 2009 - dropping 9% - and that was after dropping another 2.7% in 2008,” said Ernie Henderson, fluid technology manager at Citgo.
He was addressing the 6th annual ICIS Pan-American Base Oils Conference. Henderson is one of the chairmen of the conference.
In 2009, total US base oil output fell 12% year on year, reaching 55.4m bbl, according to the Energy Information Administration (EIA).
The year's total included 46.3m bbl of paraffinic base oils and 9.1m bbl of naphthenic base oils, according to the EIA. The total output for 2009 was the lowest since 1993.
The EIA has released production figures through September, which showed increased production addressing the improved demand.
Naphthenic production through September has been 7.8m bbl, 22% higher than the 6.4m bbl produced during the same time in 2009.
Paraffinic production through September was 36.9m bbl, up 11% from 33.2m bbl at the same time last year.
“2009 demand levels were the lowest in more than 25 years, maybe even 40,” said Stephen Ames, managing director of SBA Consulting. “2010 demand should regain two-thirds of the 2008, 2009 loss mainly due to large inventory restocking and robust demand from China and India.”
The annual ICIS Pan-American Base Oils Conference concluded on Friday.
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