Canada April base oils/lube output falls

Canada’s base oils and lubricating oil output fell in April to a seven-month low, extending a regionwide drop in supplies throughout North America.

Total output of 18,840mᶟ (16,690t) in April fell by more than half from 46,850mᶟ the previous month to the lowest since last September, government data showed.

Output had mostly held in a narrow 46,000-49,500 mᶟ/month range during the previous six months.

The lower output coincided with a drop in Canada’s total oil products output in April.

But the 12pc fall in total production from the previous month was smaller than the slide in base oils and lube production.

The trend suggested other factors like lower run rates or maintenance work also had an impact on base oils production.

Refiners also focused on producing more motor fuels in April. Production of jet fuel as a share of output rose to 5.8pc of the total, up from a 3.6pc share in March.

Production of middle distillates and gasoline as a share of total output rose to a four-month high of 71.9pc.

The rising share of motor fuels output mirrored several other major markets and followed a surge in middle distillate prices relative to crude in recent months.

The higher prices contrasted with a slower rise in base oil prices.

The price trends have incentivized refiners to produce more motor fuels in response.