US’ October base oils exports recover

US base oils exports recovered in October from unusually low levels during the previous two months.

But they remained lower than usual.

Exports stayed low since August partly because of maintenance work at various plants during that time. The maintenance work cut supply and limited the volume of surplus cargoes for export.

Cargo prices were also less competitive than prices in other regions. The trend limited arbitrage opportunities for supplies that were available.

A wave of arbitrage cargoes from Asia-Pacific to Latin America at the end of the third quarter instead covered a large portion of that market’s requirements at the beginning of the fourth quarter.

A seasonal slowdown in domestic lube demand in the US during the final months of the year was set to coincide with a pause in plant maintenance work.

The moves raised the prospect of a rise in surplus volumes to clear at the end of this year and early next year.

Any such volumes would likely face persistent competition for outlets like India.

Signs of a slowdown in Asia-Pacific shipments to Latin America could trigger firmer demand in that market.

US base oils exports of 1.64mn bl (230,560t) in October recovered from 1.30mn bl the previous month, government data showed.

The September supplies had been the second lowest since September 2021. The lowest volume since then had been in August.

Exports had fallen in September 2021 after a hurricane struck the US Gulf coast region.  

Exports fell in September this year even as US Gulf coast refiners avoided any weather-related damage during the third quarter.

The drop in shipments instead followed a heavy round of plant maintenance work during that period.

The round of maintenance work continued through October.

Base oils exports from the district of Houston-Galveston fell in October to an 11-month low of 303,610bl.

Exports from the district typically came to around 470,000 bl/month over the past year.

Exports from the district of San Francisco edged up to 27,610bl in October.

But they held below the 60,000bl level for a third month and remained far below average levels of close to 200,000 bl/month in 2021.