US’ July base oils exports rebound

US base oils exports rose in July to their third-highest level in more than four years amid signs of a pick-up in refinery production levels.

Base oils exports of 2.10mn bl (295,270t) in July rebounded from a four-month low of 1.58mn bl in June, government data showed.

The rise in shipments boosted total exports to 13.39mn bl in the first seven months of the year.

The volume was up 7pc from 12.50mn bl during the same period last year and the highest for that period in more than seven years.

The July volume was the third highest since early 2018. The highest exports since then were in March and May this year.

The high volumes helped to cover strong overseas demand in markets like Latin America and unexpectedly tight supply in Europe.

The tight availability in that market in turn boosted demand from regions such as Africa that typically procured most of their supplies from Europe.

Base oils exports remained high even as unusually strong diesel prices this year incentivized US refiners to boost production of middle distillates.

By contrast, US base oils production held steady in the first half of the year, well below their maximum levels.

The high export volumes coincided with strong domestic demand in the US. The country's base oils stocks tightened in response.

The rebound in base oils exports in July followed a jump in shipments from the district of Mobile in Alabama to more than 700,000bl.

The volume was up from around 220,000bl in June and the highest in more than five years.

Exports from San Francisco also rose sharply in July to almost 207,000bl. There had been almost no shipments from the district in June.

A sharp drop and then rebound in export levels is a trend that often takes place during and after plant maintenance work.