Argus Americas Base Oils

Copyright © 2018 Argus Media group

Argus Americas Base Oils

Issue 18-4 Friday 26 January 2018

Market coMMentary argus us spot prices

Base oil market prices, news and analysis

argus usgc domestic prices$/USG $/t

Low High ± Low High ±

group iSN 150 2.22 2.38 +0.02 673.00 721.00 +6.00SN 500 2.54 2.70 nc 757.00 805.00 ncBright stock 3.17 3.33 nc 932.00 979.00 ncgroup iiN100 2.19 2.35 +0.02 679.00 729.00 +6.50N220 2.24 2.40 +0.02 683.00 732.00 +6.00N600 2.57 2.73 +0.02 771.00 819.00 +6.00group iii4cst 2.90 3.06 +0.04 914.00 964.00 +13.006cst 2.91 3.07 +0.04 917.00 967.00 +13.008cst 3.05 3.22 +0.04 961.00 1,014.00 +14.00Volume: 50t minimum

argus usgc group i bulk export prices$/USG $/t


SN 150 fob 2.18 2.34 +0.02 661.00 709.00 +6.50SN 500 fob 2.54 2.70 +0.03 757.00 805.00 +9.00Bright stock fob 2.77 2.93 nc 814.00 861.00 ncVolume: 1,000t minimum

argus usgc group ii bulk export prices$/USG $/t


N100 fob 2.15 2.31 +0.02 667.00 716.00 +6.50N220 fob 2.20 2.36 +0.02 671.00 720.00 +6.00N600 fob 2.54 2.70 +0.03 762.00 810.00 +9.00Volume: 1,000t minimum

argus usgc naphthenic domestic prices$/USG $/t


Pale oil 60 2.63 2.79 nc 779.00 827.00 ncPale oil 100 2.71 2.87 nc 794.00 841.00 ncPale oil 500 2.65 2.81 nc 761.00 807.00 ncPale oil 2000 2.80 2.96 nc 799.00 844.00 ncVolume: 20t minimum

argus usgc naphthenic bulk export prices$/USG $/t


Pale oil 60 fob 2.26 2.42 +0.02 670.00 717.00 +6.00Pale oil 100 fob 2.30 2.46 +0.02 674.00 721.00 +6.00Pale oil 500 fob 2.27 2.43 +0.02 652.00 698.00 +6.00Pale oil 2000 fob 2.31 2.47 +0.01 659.00 705.00 +3.00Volume: 1,000t minimum

US base oils prices are firm, supported by balanced supplies and higher feedstocks and competing fuels prices.

Crude prices have continued to increase this week, reach-ing their highest levels since December 2014. The increasingly higher feedstock prices continue to provide upwards price pressure for base oils.

Several more Group II+ and Group III producers have raised their posted prices this week. These followed a round of Group II and Group I posting increases earlier this month.

Motiva first raised its Group III 4cst and 6cst prices by $0.10/USG with effect from 5 January. This lifted Motiva’s postings for 4cst to $3.03/USG and 6cst to $2.98/USG. Exx-onMobil then began to notify its customers on 8 January of a $0.22/USG increase to its Group II mid-viscosity and Group II+ light-viscosity prices with effect from 26 January.

group iii postings rise Phillips 66 and Petro-Canada this week raised their Group II+ and Group III posted prices by $0.22-0.24/USG. Avista Oil also increased its Group III 4cst posted price by $0.22/USG with effect from 29 January. More Group III suppliers are likely to raise their prices in the coming weeks.

Several of the Group I posted price increases announced in

argus spot us sn 150 vs posted prices $/USG

1.50

2.00

2.50

3.00

3.50

3 Feb 17 2 Jun 17 29 Sep 17 26 Jan 18

US SN 150 ExxonMobil HollyFrontierPaulsboro

Copyright © 2018 Argus Media group Page 2 of 9

Issue 18-4 Friday 26 January 2018 Argus Americas Base Oils

Group I * ExxonMobil Gulf coast HollyFrontier Paulsboro Refining east coast Calumet Shreveport

Effective $/USG ± Effective $/USG ± Effective $/USG ± Effective $/USG ±

70/75 26 Jan 18 3.13 +0.15

100 26 Jan 18 3.19 +0.15 26 Jan 18 3.13 +0.15 25 Oct 17 3.29 +0.12

150 26 Jan 18 3.24 +0.15 26 Jan 18 3.31 +0.15 25 Oct 17 3.24 +0.12

250 26 Jan 18 3.22 +0.15

300/350 26 Jan 18 3.11 +0.15

500 26 Jan 18 4.07 +0.15 25 Oct 17 3.78 +0.12

600/650 26 Jan 18 3.79 +0.15 19 Jan 18 4.10 +0.15

700 25 Oct 17 3.81 +0.12

Bright stock 01 May 17 4.61 +0.15 24 Apr 17 4.69 +0.20 04 May 17 4.76 +0.15 27 Apr 17 4.79 +0.15

Group II * Phillips 66 Gulf coast Chevron Gulf coast Motiva Gulf coast FHR Gulf coast


70 12 Jan 18 2.95 +0.13 12 Jan 18 2.80 +0.13

75/80 12 Jan 18 2.95 +0.13 12 Jan 18 2.80 +0.13

100/120 12 Jan 18 2.90 +0.16 10 Jan 18 2.89 +0.12 05 Jan 18 2.47 +0.10 12 Jan 18 2.77 +0.16

200/220 12 Jan 18 2.98 +0.13 10 Jan 18 2.99 +0.12 05 Jan 18 2.54 +0.10 12 Jan 18 2.79 +0.13

600 12 Jan 18 3.42 +0.12 10 Jan 18 3.44 +0.12 05 Jan 18 2.84 +0.10 12 Jan 18 3.31 +0.12

Group II+ * SK Lubricants Gulf coast Phillips 66 Gulf coast ExxonMobil Gulf coast Petro-Canada Mississauga


50/60 25 Jan 18 4.42 +0.24

65 26 Jan 18 4.58 +0.24

70/80 01 May 17 4.34 +0.20 25 Jan 18 4.43 +0.24

100 16 Jan 18 3.61 +0.22

110/130 26 Jan 18 3.61 +0.22

Group II+ *Kleen Performance Products Effective $/USG ±

110/130 15 Jan 18 3.81 +0.12

240 15 Jan 18 3.86 +0.12

Group III * SK Lubricants Gulf coast Phillips 66 Gulf coast Petro-Canada Mississauga

Effective $/USG ± Effective $/USG ± Effective $/USG ±

4cst 01 May 17 4.66 +0.20 25 Jan 18 4.66 +0.22 26 Jan 18 4.87 +0.22

6cst 01 May 17 4.66 +0.20 26 Jan 18 4.87 +0.22

8cst 01 May 17 4.74 +0.20 25 Jan 18 4.84 +0.22 26 Jan 18 4.97 +0.22

Avista Oil midwest/east coast *Effective $/USG ±

Group II N150 15 Jan 18 3.25 +0.13

Group III 4cst 17 Apr 17 3.88 +0.20

AMERICAS POStEd PRICES

Group II *ExxonMobil Gulf coast Calumet Shreveport Petro-Canada Mississauga

Effective $/USG ± Effective $/USG ± Effective $/USG ±

70 16 Jan 18 2.84 +0.13

80 19 Jan 18 3.19 +0.15

100 19 Jan 18 3.06 +0.15 16 Jan 18 2.83 +0.16

150 19 Jan 18 3.49 +0.15

200/220 26 Jan 18 3.23 +0.22 16 Jan 18 2.88 +0.13

325 19 Jan 18 3.80 +0.15

350 16 Jan 18 3.18 +0.13

650 16 Jan 18 3.40 +0.13



recent weeks went into effect this week. The price increases that have taken effect are reflected in the Argus Americas Posted Price table.

Several more major and independent lubricant blenders have announced price increases for their finished products. This latest round of lubricant price increases comes shortly after the rise in Group II and Group I base oils postings. The lubricant price increases reflect the impact of higher prices for base oils and additives as well as increased transportation costs.

Demand rises ahead of price increaseDomestic blenders have seen a pick-up in orders for finished products as customers seek to secure supplies before the price increases take effect next month. The stronger-than-usual do-mestic demand for base oils and increased orders for finished products has signalled a possible earlier start to the spring buying season.

But some blenders have sought to secure more supplies in January in an effort to get ahead of any further price increas-es.

Group II prices have held firm as surplus supplies continue to be cleared in the domestic and export spot market.

A few Group II producers have prompt supplies available on a spot basis. These supplies are available at higher levels fol-lowing the recent round of posted price increases. Spot export offers have similarly increased by $0.10-0.16/USG in recent weeks.

Market coMMentary

Feedstocks$/USG $/bl

Price ± Price ±

Nymex WTI crude front month 1.56 +0.04 65.51 +1.56

USGC low sulphur VGO 0.5% cargo 1.93 +0.03 81.26 +1.31

USGC high sulphur VGO 2% cargo 1.90 +0.03 79.76 +1.31

Feedstocks premiums$/USG $/bl

Price ± Price ±

SN 500 premium to WTI 1.06 -0.01 44.56 -0.30

SN 500 premium to VGO 2% 0.72 nc 30.31 -0.05

oil products$/USG $/bl

Price ± Price ±

NYH heating oil barge 2.01 +0.04 84.33 +1.73

USGC 10ppm diesel 62 cargo 2.07 +0.07 87.06 +3.17

oil products premiums$/USG $/bl

Price ± Price ±

Heating oil premium to WTI 0.45 +0.01 18.82 +0.17

Heating oil premium to VGO 2% 0.11 +0.01 4.57 +0.42

SN 500 premium to heating oil 0.61 -0.01 25.74 -0.46

argus Sn 500 premium to vacuum gasoil 2% $/USG

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

20 Feb 15 12 Feb 16 3 Feb 17 26 Jan 18

argus spot US Sn 150 premium to ny heating oil $/USG

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

20 Feb 15 12 Feb 16 3 Feb 17 26 Jan 18

Pemex Salamanca pricesMXN/t * $/t $/USG

Price ± Price ± Price ±

Group ISN 100 15,418.63 nc 834.16 +8.07 2.71 +0.03SN 150 15,911.87 nc 860.85 +8.33 2.80 +0.02SN 250 14,408.90 nc 779.53 +7.54 2.56 +0.02SN 500 18,766.15 nc 1,015.26 +9.81 3.36 +0.03SN 650 21,532.19 nc 1,164.91 +11.27 3.91 +0.04Bright stock 24,961.14 nc 1,350.42 +13.06 4.55 +0.05* prices in Mexican peso/t effective from 01 Jan



Market coMMentary

Higher prices complicate arbitrage dealsThere is firm overseas demand for Group II supplies from the US. But prices for these supplies are now too high to close deals to markets such as India.

A few more shipments of Group II supplies from the US have been lined up to move to India. Most of these supplies were secured last month or earlier this month.

A major US Gulf coast refinery has spot cargo volumes of its N220 and N600 available for export in February. Another major Group II producer also has cargo volumes of its mid- and heavy-viscosity supplies available for February. These excess supplies have been offered into the Indian and Mideast Gulf markets.

A major US Gulf coast producer has sold most of its surplus Group II supplies through February. Most of these supplies have moved to India. A smaller volume of surplus supplies has moved to Latin America.

Several vessel enquiries have surfaced to move supplies of various Group II base oils from the US Gulf coast to India and the Mideast Gulf in February. The volumes ranged from 5,000t to 15,000t.

Limited supplies support Group IGroup I prices are firm amid limited supplies. A major Group I producer that has had large surplus volumes of its heavy grades has moved to clear these supplies in the export market.

A major producer will begin a planned turnaround from mid-February. The planned work is expected to last between

six and seven weeks and will involve the refinery’s sole crude unit. The producer has built up sufficient inventories ahead of the turnaround.

Some suppliers continue to look for a large volume of Group I supplies to be shipped to the Caribbean over the next few months. The search for these supplies has extended into the European market.

A couple of vessel enquiries have surfaced to move excess supplies from northwest Europe and the Baltic region to the US Gulf coast. One of these was for a vessel to move 5,000t of base oils from northwest Europe to the US Gulf coast in February. Another vessel enquiry was seen to move up to 7,000t of base oils from the Baltic region to the US Gulf coast in January.

Fire prompts brief shutdownA couple of refineries have had small fires in the last week. A refinery that produces premium-grade light- and mid-viscosity grades and Group I heavy grades had a boiler fire on 17 Janu-ary. The refinery was shut for three days.

Another major US Gulf coast refinery had a small fire on 22 January. It remains unclear what units were involved and what, if any damage, occurred.

Group III prices have continued to increase amid balanced supplies amid a heavy round of refinery maintenance.

A round of Group III refinery maintenance in Asia-Pacific and the Mideast Gulf in the first few months of the year will curb production at these plants. Some producers have suffi-

US base oil exports to Brazil ’000 bl

0

100

200

300

400

500

Oct 08 Oct 11 Oct 14 Oct 17

argus spot US Pale oil 60 premium to crude $/bl

35

40

45

50

55

60

65

3 Feb 17 2 Jun 17 29 Sep 17 26 Jan 18

Crude front month = 0

Premium to WTI Premium to LLSPremium to Brent



US naphthenic base oils prices have held firm amid a round of producer price increases, balanced supplies and higher crude prices.

A naphthenic refinery started last week a month-long planned turnaround. The refinery will not produce any naph-thenic base oils during the maintenance shutdown.

Another naphthenic refinery will begin a planned turn-around this weekend. This maintenance is expected to last

Naphthenic base oils

cient supplies in storage tanks in the US to cover their commit-ments in the region.

More unapproved Group III supplies will arrive in the US in late February. These supplies will come from the Mideast Gulf.

Market coMMeNtary

between two and three weeks. The producer is not likely to have any spot supplies available until late February.

Another naphthenic refinery will have a planned turn-around later in the first quarter. This maintenance is planned to last four to six weeks.

Some buyers have been unable to secure additional prompt supplies amid the round of refinery maintenance.

Those producers that have had surplus naphthenics con-tinue to clear their supplies into the export market. A large volume of heavy viscosity pale oils has been lined up to move to west Africa in the first half of February.

The pale 60 premium to four week-average WTI crude prices slid to $50.53/bl, holding at its lowest levels since early March 2017.

Upcoming / recent base oil plant maintenance / shutdowns / closuresRefiner Location timing capacity Capacity affected cause

Holly Frontier Tulsa, Oklahoma, US 20 Feb 2018 for 6-7 weeks 9,500 b/d Partial CDU maintenance

San Joaquin Refining Bakerfield, California, US 26 Jan 2018 for 3 weeks 8,100 b/d NA Maintenance

LyondellBasell Houston, Texas, US Mid-Jan 2018 for 30 days 4,600 b/d NA Maintenance

Calumet Princeton, Louisiana, US 1Q 2018 for 4-6 weeks 6,900 b/d NA Maintenance

Avista Oil Peachtree, Georgia, US 02 Dec 2017 for 4-5 days 1,600 b/d All Maintenance

HCC Indianapolis, Indiana, US 31 Oct 2017 for 3-4 days 2,500 b/d All Maintenance

Calumet Shreveport, Louisiana, US Mid-Oct to 02 Nov 2017 8,000 b/d Partial Maintenance

Holly Frontier Tulsa, Oklahoma, US 1H Oct 2017 for 2 weeks 9,500 b/d All Maintenance

Chevron Pascagoula, Mississippi, US 07 Oct 2017 for 2 weeks 23,000 b/d All Hurricane contingency

Valero Three Rivers, Texas, US 03 Oct 2017 for 1 month 2,400 b/d All Maintenance

Avista Oil Peachtree, Georgia, US 05 Sep 2017 for 5-6 days 1,600 b/d All Maintenance

LyondellBasell Houston, Texas, US 29 Aug to Mid-Oct 2017 4,600 b/d All Feedstock shortage

Motiva Port Arthur, Texas, US 29 Aug to 04 Oct 2017 40,000 b/d All Flood repairs

ExxonMobil Baytown, Texas, US 27 Aug to 25 Sep 2017 28,000 b/d All Flood repairs

MaiNteNaNce aNd shUtdowNs

Every effort has been made to verify information directly with appropriate company sources. Some information has been obtained from usually reliable sources,but cannot be officially confirmed with the refinery concerned. The list will be updated when new information becomes available.



Vessel fixtures: Americas Vessel Loading port Next port B/L Date Volume, t Freight, $/t

Chembulk Savannah USGC Le Havre Ely Jan 3,300 ---

RHL Augsburg MED ECSA 11-14 Jan 4,600 ---

TBD USGC ECSA 25-31 Jan 8,150 ---

Vessel enquiries: Americas tLoading port Next port B/L Date Volume

USGC WCI 1H Feb Up to 15,000

USGC WCI 2H Feb Up to 10,000

USGC WAF 1H Feb Up to 11,000

Riga USGC Jan Up to 7,000

Rotterdam Houston Feb 5,000

West Med Caribs Prompt 3,000

Freight rates (US) * $/tRoute 1,000t 3,000t 5,000t 10,000t

US Gulf coast-Rotterdam 80 55-60 49-50 44-48US Gulf coast-Brazil 78-82 60-63 50-54 44-46US Gulf coast-Far East 135 86-90 75-80 70-74US Gulf coast-India 120 92-95 80-82 70-72

* rates for January 2018, provided by SPI Marine (www.spimarineusa.com)

Arbitrage opportunities - Group I $/tSN 150 SN 500

This week

Prior week

This week

Prior week

Asia-US domestic +2.00 +6.00 -29.00 -9.00

Europe export-US domestic -33.00 -29.00 -9.00 +1.00

Baltic Sea-US domestic +57.00 +61.00 +51.00 +61.00

US export-Singapore +80.00 +81.50 +99.00 +103.00

Arbitrage opportunities - Group II $/tN100/N150 N500/N600

This week

Prior week

This week

Prior week

Asia-US domestic -11.00 -12.50 -10.00 -11.00

US export-ARA +173.50 +180.00 +189.00 +198.00

US export-India +98.50 +100.00 +74.00 +83.00

US export-Singapore +108.50 +105.00 +109.00 +108.00

AmeRIcAS FReIGhT RATeS AND ARBITRAGe SPReADS

mARkeT FUNDAmeNTALS

Sources: Country data for base oil and lube sales, production, imports and exports taken from national sources. US: Energy Information Administration. Coun-try data for industrial production growth taken from national sources. Automobile sales data taken from national automobile associations. US: Autodata Corp.

Oct 2017 Industrial overview Lube/base oils overviewAutomobile

salesIndustrial growth Production Sales Import export

’000 mom% Yoy% Yoy% ’000t mom% Yoy% ’000t mom% Yoy% ’000t mom% Yoy% ’000t mom% Yoy%

US* 1,355 -11 -1 +0.90 797.2 +32 +11 540.8 +19 -5 153.5 -4 -5 428.2 +11 +17

Argentina* 12.4 +5 +20 0.0 -34 -30 0.0 +0 -100Brazil* 203 +2 +28 +5.30 51.5 +3 +9 57.0† -32 -53 36.4 -10 -54 30.9 +426 +432Mexico* -1.10 13.1 +181 +3

* The conversion factor used is 159 litres to a barrel and 7.1 barrels to a metric tonne. † Apparent demand. ‡ 4 weeks to end-month. ^ Taiwan lube production plus imports



News

Mexico’s November base oil output, imports slipMexico’s base oil production and imports fell in November, coinciding with a slowdown in the country’s lube demand.

Base oils output fell to 2,457 b/d (10,380t) in November. The volume was down from a seven-month high of 3,007 b/d in the previous month and 22pc lower than in the same month the previous year. Total output of 680,439 bl in the first 11 months of the year was 31pc down from the same period a year earlier.

A sustained surge in imports more than covered for the drop in supplies from Mexico’s sole base oils unit at Pemex’s 245,000 b/d Salamanca refinery. But even those shipments edged down in November as supplies from the US remained lower than usual.

Mexico’s total base oil imports of 73,320 kilolitres (64,900t) in November were down from 76,310kl in the previous month and the second-lowest since June. Supplies of 69,200kl from the US remained below the 70,000 kl/month level for a second month. They had averaged more than 80,000 kl/month in the third quarter of the year.

The slowdown followed storm-related disruptions to US Gulf coast base oil production from late August through to the end of the year. The subsequent drop in production capacity during that period curbed the size of US refiners’ typical over-hang of surplus volumes at the end of the year.

But the drop in supplies was relative. Imports from the US

Us base oil production, sales ’000 bl

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Oct 16 Feb 17 Jun 17 Oct 17

Production Sales

Us base oil exports, imports ’000 bl

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

Oct 16 Feb 17 Jun 17 Oct 17

Exports Imports Net imports

were lower, but they remained well above typical volumes before early 2016, when Mexico began allowing fuel imports. A large portion of the base oil imports are blended with diesel as a fuel extender.

Mexico’s base oil imports got some support in October from a rise in shipments from markets such as Curacao and South Korea. But supplies from those sources fell back in November.

The exception was Russia. Imports from that market rose to 2,220kl in November. The volume was up from 1,220kl in the previous month and the highest since early 2011. Before October, there had been no supplies from that market since the beginning of 2013.

Brazil’s November base oil, lube output fallsBrazil’s base oil and lube output fell in November to a four-month low, curbing the impact of a rise in the country’s imports of the lubricant feedstock.

The instability of base oil output led to a cut in produc-tion in the first 11 months of the year to the lowest level in at least 17 years. The fall in output was compounded by a drop in the country’s base oil imports during that period, leaving net supplies at their lowest level since 2009. The slowdown has co-incided with a gradual recovery in the country’s lube demand.

Base oil and lube output fell to 277,330 bl in November, according to ANP. The volume was down from 365,800 bl the previous month and the lowest since August. Output of 3.39mn

Market fUNdaMeNtals



News

bl in the first 11 months of the year was 4.3pc lower than year-earlier levels.

A pick-up in imports partially countered the impact of lower domestic production amid a revival in supplies from the US. But the size of the typical rebound in imports in the sec-ond half of the year lagged far behind year-earlier levels.

Base oil imports of 34,890t in November were up from 23,560t in the previous month and the highest since July. Even so, total imports of 170,690t in the five months to Novem-ber were down from 207,530t during the same period a year earlier.

The more muted rise in imports in the second half of the year mostly reflected a drop in supplies from the US. These recovered to 20,490t in November, up from 15,840t the previ-ous month.

Supplies held in a similar narrow range in August and September. The steady imports contrasted with a surge in US supplies during the same period last year. The lower volumes this year followed the widespread storm-related disruption to US base oil production from late-August. Refiners in that market then prioritised domestic buyers as output recovered during the fourth quarter of the year. The effect was to slash the volume of US base oils for export at a time of year when that market typically faced a surplus of such supplies.

There was a pick-up in Brazil’s base oil imports of premi-um-grade supplies from other markets. But these were insuf-ficient to cover for the smaller-than-usual volume of shipments from the US.

Imports of premium-grade supplies from South Korea rose in November to a six-month high of 5,200t. Supplies from Ma-laysia climbed to a three-month high of 4,340t.

Imports of Group I supplies from Europe also rose to a one-year high of 1,410t. But the volume was still small, highlighting the sustained slide in demand for these supplies.

Tighter domestic supplies left Brazil with limited volumes for export. These remained low at just 310t in November. The volume was up from just 220t the previous month, but still the second-lowest since March.

Curacao seeks Shell’s return to refineryThe governments of Curacao and the Netherlands are discuss-ing with Anglo-Dutch major Shell the possibility of its return to the management of the Caribbean island’s 350,000 b/d Isla oil refinery, Curacao government officials tell Argus.

Shell operated the refinery until 1985 when it transferred the asset to the island’s government after reporting heavy losses. The refinery was built by Shell and commissioned in 1918.

Isla is currently operated by Venezuela's struggling state-owned oil company PdV under a lease that expires at the end of 2019.

Discussions about Shell’s involvement in the operation of Isla have been taking place since November 2017, when the government said it doubted the ability of Chinese state-owned Guangdong Zhenrong Energy (GZE) to carry out a $5.5bn proj-ect to upgrade the refinery.

Curacao prime minister Eugene Rhuggenaath “has said pub-licly that if Shell is still interested in the modernization of the refinery, and if the company appeared to be the best option, then it will be selected,” one official said.

Shell declined to comment on its proposed return to Cura-cao refining.

The Dutch-controlled island’s government unilaterally cancelled the agreement with GZE on 1 January, saying the company did not have the money to deliver the project, and did not have "the unconditional support of the Chinese govern-ment as it had indicated when signing the agreement."

Curacao sought the assistance of the Netherlands in finding a replacement for GZE “as there is little time to conclude an agreement with an operator before PdV abandons the plant,” another official said.

“A shutdown of the refinery would severely harm the island’s economy, and The Hague wants to prevent any eco-nomic dislocation in any part of the kingdom.”

Curacao is 64km (40mi) off Venezuela's coast. PdV, which is in arrears on billions of dollars in debt, has traditionally lever-aged Isla to process its crude into gasoline, naphtha, diesel, jet fuel, asphalt, base oils and lubricants, and to blend its diluted extra-heavy crude with light crude for export.

GZE and Curacao's government agreed in November 2016 to upgrade the refinery, located at Schottegat, under a 40-year lease, after PdV indicated it was not interested in renewing its agreement.

But the government has also been studying the possible involvement of Chinese firm Baota Petrochemical “to which heavily indebted GZE has been trying to hand the refinery project,” the officials said.

Baota Petrochemicals has received a commitment of $3bn

illuminating the marketsPetroleum


PublisherAdrian Binks

CEO AmericasEuan Craik

Chief operating officerMatthew Burkley

Global compliance officerJeffrey Amos

Commercial managerKaren Johnson

Managing editor, AmericasJim Kennett

Editor: Eva MolinaTel: +1 713 360 [email protected]

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Argus Americas Base Oils is published by Argus Media group

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for upgrading the refinery from the mainly Chinese govern-ment-funded development bank ADIB, GZE said earlier in January.

“We simply want a sound and reliable company to manage and modernize the refinery so there are no uncertainties over its future,” one official said.

The call for Shell’s return coincides with a souring of rela-tions between Venezuela and the Dutch Caribbean. Caracas closed it border with Curacao, Bonaire and Aruba in early January, blaming the islands for smuggling Venezuelan goods.

US trucking volumes down 5.7pc in DecemberUS trucking volumes decreased in December, according to American Trucking Associations (ATA) data released today.

ATA’s seasonally-adjusted, for-hire truck tonnage index was 142.9 in December, marking a 5.7pc drop from the previous month’s value of 151.6.

Compared to the same month in 2016, December truck ton-nage was up 5.9pc. Accounting for the entire year, the index was up 3.7pc, marking its largest annual increase since 2013.

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“Despite the decline in December, last year was a solid year for truck tonnage, especially during the second half of 2017,” ATA chief economist Bob Costello said.

The index is calculated based on survey responses from ATA members on tonnage actually hauled by fleets. It awards 100 points for every 2,000t hauled.

US drivers traveled 269.2bn miles in NovemberUS drivers traveled 269.2bn miles in November, a 0.4pc in-crease over October and a 0.9pc rise from the same month in 2016, according to Federal Highway Administration (FHA) data.

Travelers in the west region — which includes Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming — re-corded the most vehicle miles traveled (VMT) at 61.5bn.

Northeast travelers — including the New England states, New Jersey, New York and Pennsylvania — recorded the fewest VMT at 35.6bn.

VMT serves as a proxy for gasoline demand.

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