Global base oils supply fell in July from year-earlier levels for the fifth time in six months, while demand rose.The diverging trends cut surplus supply at a time of year when it typically starts to rise.Global base oils prices mostly held firm or rose relative to feedstock and competing fuel prices at the start of the third-quarter, mirroring those signs of balanced-to-tight fundamentals.The dynamic suggested that global base oils supply would need to keep falling and demand hold firm to sustain base oils margins at those higher levels.Global base oils supply instead showed signs of rising.Global supply of close to 2.80 million tonnes in July rose from less than 2.72 million tonnes the previous month, government data showed..The rise in supply in July from June repeated a typical trend that usually reflected the completion of plant-maintenance work during the second quarter of the year.The rise in supply in July this year mostly reflected a jump in output in the Americas market to the highest level in more than three years.Global supply still fell by 2% in July and for a fourth straight month from year-earlier levels amid shrinking output in Europe and Asia..Lower supply contrasted with a rise in demand in July from year-earlier levels for the first time in seven months amid unexpectedly strong consumption in the US and firm demand in Asia.The surplus of supply over demand duly fell in July from June at a time of year when it usually rises.An extension of that trend would require supply to keep falling and demand to hold firm.Asia’s base oils supply instead rose in August from year-earlier levels for just the second time in the past eight months.The region’s supply could get a further boost following the start-up of a new Group II unit in Singapore in September.Asia’s weaker heavy-grade base oils price-premium relative to gasoil throughout the third quarter of the year coincided with those signs of improving supply fundamentals.Europe’s premium-grade base oils margins by contrast held firm in recent months, while US base oils margins held in a narrow range.The firm margins suggested that tighter-than-usual supply-demand fundamentals in those markets extended through the rest of the third quarter of the year.The firm margins incentivized refiners to maintain or raise output at the start of the fourth quarter of the year..US’ July base oils demand rises.Europe’s July Group III base oils supply rises.Netherlands’ July base oils supply falls.UK’s July base oils output falls.Asia’s July lube demand rises.India’s August lube demand rises
