HF Sinclair saw profit from its base oils and lube units fall in the second quarter of the year in the face of weaker demand and high costs.Operating profit of $51.4mn in the three months to end-June fell by 62pc from year-earlier levels. The drop in quarterly profit was the fourth in a row.Profit fell on the back of a 19pc fall in revenue.Sales faced pressure from weaker demand and lower base oils prices.The unit’s specialty products sales volume fell by 14pc in the three months to end-June and for the third quarter in a row. Softer lubricants consumption in turn curbed US refiners’ leverage to maintain firm base oils prices relative to feedstock costs.The unit’s 12pc drop in costs was smaller than the fall in sales, partly because of HF Sinclair’s ‘first in, first out’ (FIFO) accounting method that cut the benefit of lower costs during the quarter.With sales falling faster than costs, the base oil and lube unit’s operating profit margin fell to 7.4pc in the second quarter.The margin fell from year-earlier levels of close to 16pc and from 10.6pc in the first quarter of the year..US’ May base oils/lube demand rises
