Americas’ January base oil supply falls

Base oils supply in the Americas region fell in January to a ten-month low amid a drop in output in every major base oil-producing country.

Supply of around 740,000t in January fell from more than 835,000t the previous month to the lowest since March 2021, according to production data from major base oil-producing countries in the region.

The first quarter of 2021 was when a swathe of US refining capacity was taken offline following an Arctic storm that struck the US Gulf coast in February 2021.

There was no such unplanned event that triggered the drop in supply in January this year.

The lower supply instead reflected a simultaneous drop in base oils output in Canada, the US, Brazil and Argentina.

The drop in US output was concentrated on the US Gulf coast region. The lower supply coincided with firm US base oil exports that month.

The country’s lube and base oil stocks then fell in January for the first time in six months.

The fall in output in Brazil and Argentina followed a sustained slowdown in lube demand in those markets. The lower supply similarly helped to clear some of their surplus volumes.

The drop in supply has also curbed the region’s ability to move surplus shipments to other markets like Africa at a time when availability from other regions is also tightening.