Mississippi river level challenges base oil supplier deliveries

03 May 2011 19:40  [Source: ICIS news]

HOUSTON (ICIS)--Near-historic water levels expected on the Mississippi river near Vicksburg, Mississippi, are presenting base oil supplier Ergon Refining with delivery challenges, the company said on Tuesday.

Ergon said it plans to continue operating through the anticipated flood conditions, and will be constantly updating and evaluating details concerning the expected cresting of the river over the next several days.

Ergon further said it would utilise delivery systems other than river barges, with affiliated trucking and terminaling companies ready to provide alternative transport.

The US base oils market is currently dealing with very tight fundamentals characterised by narrow supply that can barely keep pace with increasing demand.

The tight supply conditions began with a series of first-quarter maintenance turnarounds that were either extended or disrupted by combinations of weather outages and unplanned operational issues.

Ergon produces about 11,300 tonnes of napththenic base oils at its Vicksburg facility.

Spot business is at a standstill in the naphthenic base oil sector in the absence of sufficient inventory for participation.

Low viscosity pale 150 naphthenic oils spot prices were last assessed by ICIS at $3.81–3.87/gal, with heavy grade pale 2000 last assessed at $4.23–4.32/gal.

All prices for naphthenic grades were under sharp upward pressure from active price initiatives ranging from 35–60 cents/gal.

($1 = €0.67)

By: Judith Taylor
+1 713 525 2653

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