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Base Oils-lubes overview Transcript
Base Oils are a synonym for base-stocks, they are mixed with additives to form finished lubricants. Biggest end-use is the automotive sector and there’s a big trend right now for higher quality base stocks, so we’re actually seeing some consolidation of our Group 1 Base Oil plants and a bigger move to Group 2, Group 3 and even gas-to-liquids plants.
Automotive emission standards are the biggest factor affecting base oils.
There’s also a seasonality factor. Heavy drive season that’s usually May to September, that’s when demand is the strongest for base oils.
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Base oils-Lubes: Market overview
Updated to Q1 2017
Supply of solvent neutrals in Europe is expected to remain tight during the first half of the quarter, with some producers thought unlikely to be offering spot volumes until February at the earliest. Sources suggest that this could exert upward pressure on prices. Brightstock supply remains healthy, with players in the export market suggesting that discounts are likely.
Spot prices in Asia for Group I and II base oils are likely to register extended gains amid snug spot availability and healthy demand. A spate of upcoming scheduled maintenance shutdowns at regional refineries in the first quarter is expected to curtail supply and lend support to spot pricing.
Americas base oil prices were largely stabilised during the second-half of 2016, with just Motiva issuing a posted price change in the fourth quarter. Export volumes continue to uphold the domestic balance for Americas base oil production. Moving into 2017, Group I base oil producers raised posted prices mostly by 20 cents/gal. Brightstock price increases were mostly at 15 cents/gal. Demand is expected to be boosted during the first quarter on seasonal changes in motor oil requirements.
News & analysis
Base oils-Lubes news & analysis
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Base Oils-Lubes Methodology
About Base oils-Lubes
Base oils are the main component of finished lubricants and are derived from the heavy crude oil fraction in vacuum distillation. They are refined to impart physical and chemical properties that will make a good lubricant. Most base oils are combined with small amounts of chemical additives to form the finished lubricants such as motor oil.
The traditional method of making base oils involves solvent extraction to remove aromatic compounds and solvent dewaxing to take out unwanted waxes. More recently hydroprocessing techniques employing hydrogen and catalysts have been used to make base oils.
Group I base oils which are mostly produced by solvent processing are used in less demanding applications. Group II and III base oils are produced by hydroprocessing and used in higher performing lubricants. Group IV base oils are synthetic oils typically based on polyalphaolefins (PAOs). Group V oils are used in the formulation of oil additives.