Americas Feb base oil supply weakens

Base oils supply in the Americas region extended its fall in February to its lowest in 11 months as US output stayed low and production in Argentina dipped.

Supply fell to less than 740,000t in February to its lowest since March 2021, according to production data from major base oil-producing countries in the region.

Supply fell from average levels of more than 810,000 t/month in 2021 to levels closer to average monthly volumes of less than 740,000t in 2020.

Supply had fallen steeply in first-half 2020 as refiners slashed run-rates during countrywide lockdowns throughout the region.

Supply remained unusually low during the first two months of this year even with refinery run rates at much higher levels.

Supply fell mostly because of the lower output in the US. The size of the dip in output in that market suggested some plant maintenance had been taking place.

Rising crude and diesel prices and tightening feedstock supply also incentivized refiners to produce more of the motor fuel.

Base oils output in Argentina also fell sharply in February from the previous month. The drop in supply more than countered the rise in Brazil’s base oil production in February.

The lower supply curbed the region’s surplus volumes for export at a time when markets like Europe and Africa are struggling to cover their base oil requirements.