ILMA Compoundings - February 2021 - 10
Base Oil Supply Tight, Demand Remains
Strong in 2021
By Amanda Hay
Unique dynamics in 2020 - from massively oversupplied
amid sidelined demand to ending with a seller's market -
have yielded unprecedented price swings in ICIS Group II
export price history.
U.S. base oil supply will be tighter than usual for as long
as refiners cap their crude runs because of weak fuels
demand - at least through the first half of 2021.
Curtailed crude runs have sent dramatic ripple effects
through the global supply chain, tightening availability of
mid- and heavy-viscosity base oil and brightstock, and disrupting traditional trade flows and seasonal buying patterns.
It has been an unexpected development, especially because
demand has not yet fully recovered to pre-coronavirus levels.
Tight supply mostly affects spot buyers, but the problem
is magnified because very few refineries globally had product
available in late 2020 and early 2021. In the U.S. specifically, refiners that usually are able to satisfy overseas demand
with surplus stocks could not keep up with buying interest.
HISTORICALLY LOW U.S. REFINERY RATES
With nine months of refinery data to draw on, the supply
picture has become clearer. Refinery rates have never been
this low for this long, at least dating back to 1990, when
the U.S. Energy Information Administration (EIA) began
tracking refinery utilization.
The low point reached in April 2020 was 67.6%. This was
not quite as low as the low point of the 2008 financial crisis,
which was 66.7%.
Gross Inputs (thousand bbl/day)
Source: US Energy Information Administration (EIA)
10
FEBRUARY 2021
| COMPOUNDINGS | ILMA.ORG
Percent Utilization
Nov 27, 2020
Aug 21, 2020
May 15, 2020
Feb 7, 2020
0
Nov 1, 2019
0
Jul 26, 2019
10
Apr 19, 2019
2K
Jan 11, 2019
20
Oct 5, 2018
4K
Jun 29, 2018
30
Mar 23, 2018
40
6K
Dec 15, 2017
8K
Sep 8, 2017
50
Jun 2, 2017
10K
Feb 24, 2017
60
Nov 18, 2016
70
12K
Aug 12, 2016
14K
May 6, 2016
80
Jan 29, 2016
16K
Oct 23, 2015
90
Jul 17, 2015
18K
Apr 10, 2015
100
Jan 2, 2015
20K
Percentage Utilization
Refinery Rates
Gross Inputs (thousand bbl/day)
INDUSTRY RUNDOWN
Market Report
http://www.ILMA.ORG
ILMA Compoundings - February 2021
Table of Contents for the Digital Edition of ILMA Compoundings - February 2021
ILMA Compoundings - February 2021 - Cover1
ILMA Compoundings - February 2021 - Cover2
ILMA Compoundings - February 2021 - 1
ILMA Compoundings - February 2021 - 2
ILMA Compoundings - February 2021 - 3
ILMA Compoundings - February 2021 - 4
ILMA Compoundings - February 2021 - 5
ILMA Compoundings - February 2021 - 6
ILMA Compoundings - February 2021 - 7
ILMA Compoundings - February 2021 - 8
ILMA Compoundings - February 2021 - 9
ILMA Compoundings - February 2021 - 10
ILMA Compoundings - February 2021 - 11
ILMA Compoundings - February 2021 - 12
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ILMA Compoundings - February 2021 - 14
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ILMA Compoundings - February 2021 - 16
ILMA Compoundings - February 2021 - 17
ILMA Compoundings - February 2021 - 18
ILMA Compoundings - February 2021 - 19
ILMA Compoundings - February 2021 - 20
ILMA Compoundings - February 2021 - 21
ILMA Compoundings - February 2021 - 22
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ILMA Compoundings - February 2021 - 24
ILMA Compoundings - February 2021 - 25
ILMA Compoundings - February 2021 - 26
ILMA Compoundings - February 2021 - 27
ILMA Compoundings - February 2021 - 28
ILMA Compoundings - February 2021 - 29
ILMA Compoundings - February 2021 - 30
ILMA Compoundings - February 2021 - 31
ILMA Compoundings - February 2021 - 32
ILMA Compoundings - February 2021 - Cover3
ILMA Compoundings - February 2021 - Cover4
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