September 2, 2003
Base Oil Price Report
By Tim Sullivan

An Aug. 21 explosion at Petro-Canada’s Lubricant Centre already appears to have tightened North American supply of Group II base oils – and the company has not yet announced a repair schedule.

Still, observers refrained from predicting whether a major disruption is in store, at least until they know how long it will take for normal operations to resume.

The explosion occurred as staff was completing the final steps to bring the Mississauga, Ontario, plant back online after a weeklong shutdown triggered by mid-August's U.S. and Canadian power failures. Petro-Canada was able to restart one of the plant’s two production trains but only is operating at half of its 12,500-barrel-per-day capacity. The train that is operating produces Group II-plus and Group III stocks, while the other produces Group II.

“Certainly no news is bad news,” one base oil buyer said. He and other sources said the problems at Petro-Canada already seem to have snugged up the Group II market, with one remarking that export availability has dried up the past two weeks. Petro-Canada has acknowledged purchasing from other suppliers to meet its own orders.

Observers also noted that Group II supply has been tight for much of the year because of production disruptions at several refineries. Still, buyers and sellers said it is too early to say whether the incident in Mississauga will seriously crimp the market.

“I think it’s just impossible to say until we know how long that train is going to be out,” a marketer said.

I just paid what I thought was an outragous $21.88 at Wal-Mart for 3 five quart Jugs of Pennzoil 5W-30 dino. That will do my car, truck, and truck tranny with some left over. Maybe things will settle down before I do may December oil change.

FWIW, they announced yesterday that the Petro Can plant in Mississauga will be closing it's doors in December 2004, and moving production to Montreal.