It's That Time Of Year, Again!

Updated: Jul 30, 2018



Mineral oil prices and characteristics are forecast for violent swings in 2018 for two reasons: More maintenance and more fuel demand.


Summer is the traditional time that refiners undergo planned maintenance “turnarounds” where the entire refinery is shut down for an overall cleaning, checking and upgrades. From beginning to end, these turnarounds affect production from anywhere from three to four months. During the maintenance turnaround, inventories of finished products can vary widely, affecting both their price and availability. While this maintenance period is a temporary impact, others like demand based changes can last years.


Unlike the demand for lubricants and white oils, which is relatively steady throughout the year, gasoline and diesel use changes widely from one season to another. The American Automobile Association (AAA) is forecasting that summer 2018 will have record breaking demand for gasoline and diesel fuel. Refiners will need to increase production of fuel products to meet this demand – unfortunately, it will come at the expense of lubricant and white oil production. This means that inventories of white oils will be reduced, but, at the same time, product characteristics will vary as lower quality feedstocks are introduced to make up for what’s been diverted to fuel production. In addition, these feedstock changes will likely impact a mineral oil’s viscosity and sulfur content as crude oil sources and refining parameters change.


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