Mobil 1 on Allocation

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Mike_dup1

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Selected ExxonMobil PAO based lubricants on allocation effective October 1, 2008.

ExxonMobil marketers (and direct served customers) were advised that allocation of Mobil 1 lubricants will take effect October 1 as a result of Hurricane Ike causing significant disruptions to supply lines to ExxonMobil Chemical's (EMC) Beaumont, TX plant. This plant produces Poly Alpha Olefin (PAO) and is the primary supplier of PAO to ExxonMobil Lubricants and Specialties (EMLS). These disruptions have reportedly forced EMC to allocate sales of PAO to EMLS, and in turn, for EMLS to place its customers on allocation of selected lubricants containing PAO.

According to marketers, the allocation is expected to last several months and impact available of virtually all Mobil 1 lubricants. Allocations are said to range from 15% to 100% based on lubricant type and package.

...and in a real life example of what this allocation means to customers, take a look at the retail shelves at lunch today.
 
Put another way, is if you use it and see it buy it. I just came back from AAP and all they had was 0W-20 and 0W-30 on the shelves, all others were out of stock. I would imagine if they are as big a supplier to others as I think they are you will see short supply in other brands of synthetics as well.

JMO,
Frank D
 
Shouldn't matter, since we all know there's no PAO in Mobil 1 anymore...
whistle.gif
 
Originally Posted By: Vilan
Shouldn't matter, since we all know there's no PAO in Mobil 1 anymore...


It depends on the specific Mobil 1 product.

All the "0W-...." are PAO. Others are blends of PAO and Group III.
 
Interesting about the ' allocation ' .

I just stopped in at my local Advanced Auto and bought two quarts of M1 0-40 and the shelves were full of Mobil 1 in all weights .
 
Just came back myself. 0w40 ..most other weights. No 0w30 or 0w20. Very narrow shelf representations.


YB @$4
shocked2.gif
 
Originally Posted By: Rolf
Originally Posted By: Vilan
Shouldn't matter, since we all know there's no PAO in Mobil 1 anymore...
whistle.gif



It depends on the specific Mobil 1 product.

All the "0W-...." are PAO. Others are blends of PAO and Group III.


Yeah. That smiley was me whistling past the graveyard of a thousand dead Mobil 1 threads. With Halloween coming up, they should be rising up to conquer BITOG any day now...
 
fyi...

Quote:
Article from LUBE REPORT (http://www.imakenews.com/lng/e_article001239508.cfm?x=bdyjv6v,b1cwnrQf)
October 22, 2008
PAO Shortage Squeezes Mobil 1
By George Gill

The continued shutdown of the ExxonMobil Chemical polyalphaolefin (PAO) plant in Beaumont, Texas, has forced ExxonMobil Lubricants and Specialties to institute a sales allocation on a variety of Mobil 1 synthetic lubricants, effective Oct. 1.

“On Sept. 15, ExxonMobil Lubricants and Specialties was notified by our primary polyalphaolefin supplier, ExxonMobil Chemical, that Hurricane Ike had caused significant disruption to production capabilities at their Beaumont, Texas, plant, and to the ability of their suppliers to make deliveries of critical raw materials and services to the site,” the company told customers in a letter obtained by Lube Report. As a result, ExxonMobil Chemical implemented an allocation on sales of PAO base stocks to customers including ExxonMobil itself. “This allocation is expected to last several months,” the letter stated.

According to Lubes’n’Greases magazine, the Beaumont facility is one of the world’s largest PAO plants, with capacity to make 82,000 metric tons per year.

ExxonMobil spokesman Kevin Allexon confirmed yesterday that the PAO plant remains shut down due to the hurricane damage. “We have folks working on the repairs, we’re making good progress, but there’s no timetable for how much longer it will be,” Allexon told Lube Report.

According to the advisory letter, customer liftings are restricted to 100 percent of prior purchases on products such as Mobil 1 SAE 0W-40, 5W-40 and 15W-50 engine oils; on Delvac Synthetic ATF; Mobil 1 High Mileage 10W-30 and 10W-40; and Extended Performance 5W-20, 10W-30 and 15W-50 motor oils. Also at 100 percent allocation is Mobil 1 ESP 5W-30.

There is a 65 percent allocation on the brand’s SAE 10W-30, and the allocations drop even further for Mobil 1 0W-20, 0W-30 and 5W-20 oils, to 25 percent. Truck and SUV 5W-30 is also at 25 percent allocation. The tightest allocations are those in force for Mobil 1 5W-30 (20 percent) and EP 5W-30 (15 percent).

In the letter, ExxonMobil explains that a product on 100 percent allocation means a customer can continue to purchase it at the customer’s average 2008 purchase levels. Volumes for the allocation are based on a customer's average monthly purchases from January to August 2008.

A Midwestern distributor that buys several truckloads of Mobil 1 synthetics a year said it had seen a lengthy delay in receiving shipments. “We placed orders back in late July and August, and we were told if we were lucky, we might see it in December,” the source told Lube Report. “It’s affecting our customers. The good thing for us is we do have other alternative brands. Somebody who's just a Mobil guy can run into problems when they don't have any synthetic alternatives.”

A Southern distributor said the PAO shortage in the market in general is impacting more than just Mobil 1. “With PAOs in general, that supply was messed up before Ike – all that did was further mess it up,” this source said. “The PAO shortage is not just confined to Mobil 1, it’s confined also to any kind of industrial oil that’s made with PAOs.”

Published by LNG Publishing Co., Inc.
Copyright © 2008 LNG Publishing Co., Inc. All rights reserved.
George Gill, Editor. Lube Report (ISSN 1547-3392), Lubes'n'Greases Magazine and Lubricants Industry Sourcebook are published by LNG Publishing Co., Inc., 6105-G Arlington Blvd., Falls Church, Virginia 22044 USA. Phone: (703) 536-0800. Fax: (703) 536-0803. Website: http://www.LNGpublishing.com. Email: [email protected]. For sponsor information contact Gloria Steinberg Briskin at (800) 474-8654 or (703) 536-7676 or [email protected].
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Strange... I thought Mobil 1 was made from Group III base stock. There is some heavy misinformation out there.

Cheap excuse to raise prices?
 
There was only one Mobil 1 viscosity thought to have reduce quantities of PAO and more Grp 3.

Most Mobil 1 oils have a majority PAO base.

All PAO based oil from any brand will be impacted by this, XOM Chemical has chosen to reduce their own Mobil 1 brands more than those of their customers. The companies that buy the PAO base from XOM Chemical are allocated only up to their past purchased quantities and not allowed to increase their orders until after the Beaumont plant is restarted. Mobil 1 brands have been reduced to 35-65% of prior orders.
 
Why would XOM sell PAO to competitors instead of making more Mobil 1? XOM makes more money by selling Mobil 1 than selling basestock to lube manufacturers. And XOM has a large Mobil 1 customer base to protect: factory fill, direct sale and retail. That doesn't make sense to me.

Also, there is no shortage of Mobil 1 0W-40 and Mobil 1 Formula M 5W-40. Those should be readily available from delaerships, quick lubes and Mobil distributors.
 
If Exxon Mobil has to take a short term hit in their own sales, while keeping their base-stock customers from jumping ship to purchase elsewhere, it will benefit them in the long run.
 
Originally Posted By: JohnfromCT
Why would XOM sell PAO to competitors instead of making more Mobil 1? XOM makes more money by selling Mobil 1 than selling basestock to lube manufacturers. And XOM has a large Mobil 1 customer base to protect: factory fill, direct sale and retail. That doesn't make sense to me.

Also, there is no shortage of Mobil 1 0W-40 and Mobil 1 Formula M 5W-40. Those should be readily available from delaerships, quick lubes and Mobil distributors.


Because likely the cost of creating a finished product eats into the profit margin of the pao, something that is more of a "something from nothing" than making the pao into m1.

It's all about profit margins. I'd bet that amsoil makes better profit turning pao than mobil can selling m1 to wal mart, on a quart basis.
 
It don't matter. I just look at this as a continued sign of "stress". Never have hurricanes impacted a market for so long in the past. Stuff never skipped a beat in my "aware" history. I don't think I can remember real issues since the 70's oil embargo. There was rationing at one point beyond that (79, maybe) ..but that wasn't due to any hurricane.

Maybe there's a demographic component to all this. Just not enough viable workers to go around. Funny how wages aren't climbing to compete with the available able bodies.
 
Perhaps.

From what I understand, Mobil 1 supplies, especially for 5W-30 & 5W-20, will be very tight until into January.

Mobil's Industrial Synthetic lubes are tight into April.

You can't get Delvac 1 5W-40 at all or any other heavy duty synthetic lubes for that matter.
At least this is what my distributor tells me.
 
NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!!!!!!!!!!!!!!!!!!!!!!!!!!! I am going to quit driving till this M1 thing gets squared away.
 
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