US base oils production down for second year but not at 2009 levels

08 October 2013 21:45  [Source: ICIS news]

SAN ANTONIO (ICIS)--US base oil production is down for the second consecutive year but not to the same low levels seen during the recession of 2009, a supplier said on Tuesday.

“The market is nowhere near the recession levels of 2009, and the market is more optimistic every year since then, but US production is down because of new production in every region,” the supplier said on the sidelines of the Independent Lubricant Manufacturers Association (ILMA) base oils annual meeting.  “The US is the king of naphthenic and Group II base oils, Europe of Group I and Asia of Group III,” the supplier said.

US base oil production totalled 27.8m bbl in the first six months of 2013, down 5% from the 29.3m bbl produced in the same period one year ago, according to the Energy Information Administration (EIA).

US base oil production dropped to 25.0m bbl in 2009.

Naphthenic base oil production reached 5.0m bbl in the first six months of the year, down from the 5.1m bbl produced the same time one year ago.

“Napthenic base oil demand has been pretty steady and likely to hold the rest of the year mostly because of demand from tyre sector and transformer oils,” a napthenic base oil supplier said. “There has been some demand drop-off from process oil and ink segments, but more demand growth from the lubricants used in the oil field.”

Paraffinic base oil production reached 22.8m bbl, down from the 24.2m bbl produced in the first six months of 2012.

“Part of the drop for paraffinic base oil production during the first half of this year can be attributed to a fire at the Chevron refinery in California in August 2012. The base oil unit hardly operated from August to May,” a trader said.

Author: Heather Doyle

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