Due to the profound changes sweeping the global base oil market Kline & Company announced last Frday the publication of the monthly Kline Base Stock Margin Index. The index simulates cash margins of typical U.S. base oil producers over the past two years. 

The index estimates typical cash margin contributions associated with U.S. Group II base stock production, from both VGO-based virgin base stock plants and Recovered Fuel Oil (RFO)-based re-refineries, simulating EBITDA before the deduction of corporate SG&A expenses.  A rolling 24-month index will be published monthly, and is available to Kline’s clients, as well as to petroleum and lubricants industry media. The index will be updated monthly and released to Kline's clients and media contacts.

“The Kline Index is being introduced to provide base stock producers with a yardstick against which they can measure their own plant’s recent profitability” said Ian Moncrieff, a director of Kline’s Energy Practice.  “The index has been developed by combining characteristic yield and cash cost structures in both conventional and re-refined Group II plants with Kline’s estimates of feedstock costs and net price realizations for their respective products slates.”

The monthly update for Kline’s Base Stocks Margin Index will be found in the Knowledge Hub.  To learn more about the Base Stocks Margin Index contact Geeta Agashe, Senior Vice President at Geeta.Agashe@klinegroup.com or Ian Moncrieff, Director at Ian.Moncrieff@klinegroup.com, both of whom work in Kline’s Energy Practice.