HF Sinclair’s base oils and lube unit turned to a profit in the third quarter of the year as it benefited from lower feedstock costs and the growing integration of its base oils and lubricants businesses.The unit’s operating profit of $93.4mn in the three months to end-September rose from $51.2mn in the second quarter and from a $5.0mn loss during the same period a year earlier.Profit rose even as sales fell by 17pc in the third quarter.Sales faced pressure from weaker base oils values relative to feedstock costs and lower sales volumes from year-earlier levels.Costs fell by 33pc in the third quarter.The lower costs partly reflected HF Sinclair’s ‘first in, first out’ accounting method, resulting in consumption of lower-priced feedstock supplies.The pressure on base oils prices also lowered costs for lubricants production.Growing inter-company sales between HF Sinclair’s base oils unit and its finished lubes unit provided insulation against lower base oils cracks and in turn supported firmer margins, Chief Executive Officer Tim Go said in an earnings call.With costs falling faster than sales, the base oil and lube unit’s profit margin rose to 13.6pc in the third quarter.The margin rose from 7.4pc in the second quarter to the highest in more than a year.The base oil and lube unit’s firmer profit margin in the third quarter contrasted with lower margins for other base oils producers in the US and in other markets. .Safety-Kleen eyes stronger Q4 earnings, rising Grp III output
